Japan trading house stocks soar as Warren Buffett increases stake

Investing.com-- Shares of Japan’s five largest trading houses rose sharply on Tuesday after billionaire investor Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) increased its holdings in the firms to a nearly 10% stake. 

Itochu Corp. (TYO:8001), Mitsui & Co., Ltd. (TYO:8031), Mitsubishi Corp. (TYO:8058), Sumitomo Corp. (TYO:8053), and Marubeni Corp. (TYO:8002) rose between 3% and 4%, helping underpin a 1.6% jump in the Nikkei 225 index.

Berkshire Hathaway hiked its stakes in the five companies to nearly 10% in each firm, filings showed on Monday, with the stake increases coming just a month after Buffett said he will steadily increase his holdings in the five companies. The trading houses had also agreed to somewhat relax a cap on Berkshire’s holdings to below 10% ownership. 

Buffett- who began investing in the Japanese trading giants in 2019, had lauded their strong cash positions and relatively low valuations. He had also highlighted similarities between them and his flagship hedge fund. 

In a February letter to shareholders, Buffett said Berkshire had spent about $13.8 billion on its holdings in the five trading houses, and sees dividend returns of $812 million in 2025. 

Known as “sogo shosha,” Japan’s five major trading houses are some of the country’s most valuable firms, and control holdings across a slew of industries. They also have some of the largest cash reserves among Japanese firms. 

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