Shares of Japan’s five biggest trading houses rose sharply on Tuesday after billionaire investor Warren Buffett signaled that Berkshire Hathaway (NYSE:BRKa) will likely increase its holdings in the companies.
Itochu Corp. (TYO:8001), Mitsui & Co., Ltd. (TYO:8031), Sumitomo, Mitsubishi Corp. (TYO:8058) and Marubeni Corp. (TYO:8002) rose between 2% and 7% in Tokyo trade, outperforming a 1.5% slide in the Nikkei 225 benchmark.
Buffett told Berkshire shareholders last week that the hedge fund will increase its holdings in the five, especially after their boards agreed to “moderately relax” limits that curbed Berkshire’s ownership to below 10%. Berkshire owned about $23 billion in the five companies by end-2024, the company’s annual report showed last week.
Buffett said the hedge fund was investing for the “very long term” in the five companies, lauding their capital spending, their management, and their attitude towards investors.
Buffett had begun investing in the trading houses in 2019, drawn by their finances, accessible stock prices and a softer yen. Buffett has at least 5% ownership in each company.
His investments paid off in 2023 and 2024 following a stellar rally in Japanese stocks, as the Nikkei scaled a series of record highs.
Berkshire has spent about $13.8 billion on its stakes in the trading houses, and expects $812 million of dividend income from them in 2025. The Omaha-based hedge fund clocked a record operating profit in 2024.
Japanese trading houses are among the largest companies in the country, and invest in a wide range of sectors, including commodities, food, and logistics. They are also closely tied to economically relevant sectors such as shipping, steel, and real estate.
