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Japanese trading companies' shares jump on Buffett comments

Published: 25 Feb. 2025, 11:59

Warren Buffett, Chairman and CEO of Berkshire Hathaway, speaks during a game of bridge following the annual Berkshire Hathaway shareholders meeting on May 5, 2019, in Omaha, United States. [AP/YONHAP]

Shares in Japan's five major trading houses rose more than 5 percent in early trade on Tuesday after billionaire investor Warren Buffett said his conglomerate Berkshire Hathaway would likely increase its ownership in them.

Mitsubishi was the top performer, up 7.5 percent, while Mitsui, Sumitomo, Itochu and Marubeni each gained more than 5 percent.

In his annual letter to Berkshire shareholders published at the weekend, Buffett said the five trading houses agreed to "moderately relax" limits that capped Berkshire's ownership stakes below 10 percent.

"Over time, you will likely see Berkshire's ownership of all five increase somewhat," Buffett wrote.

Tokyo's benchmark Nikkei share average was down 1.57 percent. Markets were closed on Monday due to a public holiday.

Known as "sogo shosha," Japanese trading houses trade in a variety of materials, products and food — often serving as intermediaries — and provide logistic support. They are also involved in the real economy in such areas as commodities, shipping and steel.

Berkshire's investment in the companies, which began in 2019, totaled $23.5 billion at the end of 2024. It has spent $13.8 billion on its current holdings and expects $812 million of dividend income in 2025, Buffett said in the letter.

REUTERS