Buffett’s Berkshire ups stakes in Japanese trading houses

WARREN Buffett’s Berkshire Hathaway increased its stakes in five of Japan’s major trading companies, according to filings released on Monday (Nov 21).

Berkshire Hathaway first bought stakes in Japan’s trading houses – also known as “sogo shosha” – in August 2020, acquiring about 5 per cent of each of the firms.

The trading companies, which invest in oil and natural gas projects globally, have booked stellar earnings in the most recent quarter fuelled by the boom in commodities. Mitsui announced a 140 billion yen (S$1.37 billion) stock buyback earlier this month on the back of a jump in earnings from higher energy prices.

Berkshire’s insurer National Indemnity increased its stake in Mitsubishi to 6.59 per cent from 5.04 per cent, according to documents filed to the Finance Ministry in Tokyo. The entity also added to its stakes in Marubeni, Itochu, Mitsui & Co and Sumitomo. It was unclear from the filings when the stakes were increased.

In a statement announcing its purchase of the initial stakes in 2020, Berkshire said it may increase its holdings in any of the firms up to 9.9 per cent.

National Indemnity did not immediately respond to Bloomberg requests for comment.

SEE ALSO

Buffett bets US$5b on chipmaking with new stake in TSMC

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

Mitsubishi shares jumped as much as 3.6 per cent as of 10.10 am local time on Monday (Nov 21), the most since Nov 1. Marubeni shares rose as much as 3.4 per cent, while Sumitomo stocks gained 2.2 per cent.  

The trading companies weren’t the only major increases in Buffett’s Asian portfolio. Berkshire Hathaway acquired a US$5 billion stake in chip giant Taiwan Semiconductor Manufacturing in the most recent quarter in a bid to benefit from its cheap valuation, technology leadership and solid fundamentals.

Separately, Berkshire Hathaway is mulling a possible yen-denominated bond offering, according to a note from Mizuho Securities, as borrowers seek out the relatively stable Japanese credit market amid a global debt rout. BLOOMBERG