Japanese trading giants, including Mitsubishi Corp. and Marubeni Corp., soared on Tuesday in response to Berkshire Hathaway’s intention to boost its stake in the sector, positioning it as a positive endorsement. Mitsubishi’s shares jumped up to 8.6% and Marubeni gained close to 8%, despite the Topix index dipping by 0.4%.
Warren Buffett’s Berkshire Hathaway initially invested in the five major Japanese trading firms back in 2020, agreeing to maintain stakes below a 10% threshold. However, in a recent shift, these companies have agreed to slightly ease this limit, as noted in Buffett’s annual letter to investors dated February 22.
Since Buffett’s involvement, these trading houses have consistently outperformed the Nikkei 225, owing not only to a surge in commodity prices in 2022 but also their expansive business operations which provide resilience against market fluctuations.
In an email, Marubeni highlighted Buffett’s interest as a testament to the sector’s significant value, while Itochu noted discussions are ongoing with Berkshire regarding potential partnerships. Buffett has commended the Japanese trading houses for their prudent dividend increases, sensible share buybacks, and restrained executive compensation compared to American firms.
Mitsubishi reported ongoing talks with Berkshire over potential collaboration projects and joint ventures. Similarly, Mitsui expressed intentions to engage in further discussions with Buffett’s conglomerate.
