Warren Buffett Goes Japanese, Increases Trading Houses Stakes (Again)

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by Tyler Durden
Monday, Jun 19, 2023 - 01:10 PM

Japanese stocks have been on a tear, up nearly 28% this year. Billionaire investor Warren Buffett's Berkshire Hathaway added a spark in April when he traveled to Tokyo and increased his investment in five of Japan's trading houses. A press release from the company Monday detailed that Buffett has further increased his stake in the trading houses, a sign that the billionaire has become more comfortable deploying capital in Japan than in Taiwan or China. 

Berkshire said its stakes in trading houses Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo were raised to an average of 8.5%. This comes after Buffett flew to Tokyo in April and announced he boosted his stakes in the trading firms from 5% to 7.4%. 

"Berkshire Hathaway's intention continues to be to hold its Japanese investments for the long term. Depending on price, Berkshire Hathaway may increase its holdings up to a maximum of 9.9% in any of the five investments," Berkshire wrote in the press release. 

Berkshire noted Buffett "will make purchases only up to an ownership of 9.9% in any of the five investments" and "will make no purchases beyond that point unless given specific approval by the investee's board of directors." 

Buffett's initial 2020 investment in trading houses has been a winning bet

One of Buffett's main attractions of the trading companies is their share buyback programs and high dividend payments. 

Meanwhile, the Nikkei 225 is having one of its best years since 2013. 

"The tailwinds for Japanese equities continue to multiply," Charu Chanana, market strategist at broker Saxo Markets in Singapore, told Reuters. 

Chanana added, "While it was previously hinted that Berkshire will increase its stake ... the announcement has come somewhat sooner than expected and will further boost optimism on Japanese stocks."