Latest news with #tradinghouses
Japan Times
04-06-2025
- Business
- Japan Times
Buffett inspires retail investors to bet on Japan trading houses
Japan's retail investors have started to place their bets on trading house stocks, heavily backed by Berkshire Hathaway's legendary investor Warren Buffett, eyeing strong business models and stellar shareholder returns. Investment demand from Nippon Individual Savings Accounts, or NISA, has spread to trading companies alongside traditional favorites like NTT, Japan Tobacco and Mitsubishi UFJ Financial Group. Mitsubishi, one of Japan's biggest trading companies, placed third for the first time since March among retail holdings under the tax-exempt savings program. That's according to data from SBI Securities, while Rakuten Securities' ranked it fourth since April. Reflecting the support from retail investors, trading house shares have been outperforming the market since U.S. President Donald Trump's "Liberation Day' tariffs on April 2, despite uncertainties over effects on trade. Japanese trading companies shares gained following comments from Buffett at the Berkshire Hathaway's annual meeting that he expects his company to hold the shares for 50 years or more. Mitsubishi, Marubeni, Mitsui & Co., Itochu and Sumitomo rose by more than 3% in reaction. "Many individual investors feel that their value-investing style aligns with Warren Buffett, who is known for such an approach, and they are inclined to follow his lead — 'If Buffett is buying, I'll follow,'' said Naomi Kurimoto, an employee in the SBI Securities Investment Market Research Department. Buffett's name on reports boosts page views driven by individual investors, she added. The five major Japanese trading houses released cautious profit forecasts for the year, setting aside hundreds of millions of dollars to hedge against tariff uncertainty. Despite these concerns, the companies have actively been pursuing dividend increases. The projected 12-month dividend yields for Mitsubishi, Mitsui & Co., Sumitomo and Marubeni are all above 3.5%, exceeding the 2.7% estimated calendar year average for 2025 for the Topix index. Although Itochu's projected 12-month dividend yield was 2.66%, it joins the other four in having doubled dividend payouts over the past five years. Characteristics of the sectors favored under the NISA program are those with low risk of dividend cuts, even if their earnings growth or share price aren't expected to rapidly rise, said Yusuke Maeyama, a researcher at NLI Research Institute. "Among high-dividend stocks, trading companies may offer an additional advantage in the form of strong expectations for future dividend increases,' he added. Corporate governance reforms also play a major role in influencing individual investors' stock selection process. The Tokyo Stock Exchange is planning to encourage companies to conduct stock splits, which would make it easier for retail investors to participate. Because trading on the TSE uses 100 share lots, a stock split would reduce the minimum investment amount. While Buffett's influence has helped trading house shares, the companies, themselves, have been making efforts to expand their shareholder base in the past year. Before the launch of the revamped NISA system at the end of 2023, Mitsubishi conducted a 3-for-1 stock split, lowering the minimum investment amount. Mitsui & Co. conducted a stock split at the end of June last year, halving the minimum investment amount. Trading houses will benefit from increased retail investor participation through programs like NISA as "they can expect medium-to-long-term ownership, which helps build a more stable shareholder base,' said Kazuhiro Sasaki, head of research at Phillip Securities Japan. On the other hand, there could be downsides like increased burden associated with servicing hundreds of investor accounts and handling of much larger shareholder meetings, he added. The total amount of new purchases made under the growth investment quota across all financial institutions' NISA accounts in 2024 reached approximately ¥12.5 trillion ($87.4 billion), according to data compiled by Japan Securities Dealers Association. At the end of 2024, the total number of NISA accounts stood at 25.6 million. Among securities firms, Rakuten Securities held the largest share with 6 million accounts, followed by SBI Securities with 5.36 million. Any deployment of funds by domestic investors would be positive for Japanese equities and even a 1 percentage point shift from cash into domestic stocks "would unleash $220 billion of flows into equities," said HSBC strategists including Herald van der Linde in a note.
Bloomberg
27-05-2025
- Business
- Bloomberg
Buyers of Indonesian Coal Claim Local Index Is Distorting Prices
A group of energy traders handling more than a 10th of Indonesia's thermal coal exports are calling for the replacement of a local index that they say is pushing prices above actual market levels. The Coalindo Index, which makes up half of the weighting of the Indonesian Coal Index, has been out of line with other gauges for months, according to senior executives at four commodity trading houses that asked not to be named due to the sensitivity of the matter. Overseas demand for Indonesian coal will drop if the situation persists, they said.
Japan Times
13-05-2025
- Business
- Japan Times
Marubeni aligned with Berkshire Hathaway on long-term value, says top exec
The top executive at Marubeni has affirmed the Japanese trading house's commitment to a long-term partnership with Berkshire Hathaway, echoing sentiments recently expressed by the U.S. investment firm. "With respect to our dialogue with Berkshire, we see a good alignment in philosophy of creating long-term value,' said Masayuki Omoto, Marubeni president and CEO. "We hope to have a good collaboration with them in the future.' Berkshire has steadily increased its stakes in Japan's five largest trading houses, with Chairperson Warren Buffett signaling in February that he plans to boost holdings further. The companies — which run businesses spanning from overseas oil and gas production to salmon farming and TV shopping — have outpaced the broader market since Buffett's initial investments in them were disclosed in 2020. The so-called "Oracle of Omaha," who will relinquish his leadership role at the company he founded by the end of the year, said earlier this month that he expects Berkshire Hathaway to hold its investments in Marubeni and other Japanese trading houses for 50 years or more. Omoto said that he's "cautiously optimistic' on the economic outlook following the U.S.-China deal to ease tariffs. Still, the company is looking for potential opportunities as trade flows change, he said, mentioning that there may be upside in the Brazilian agricultural sector.
