BY DICKENS CHAPFUDZA
Market experts believe that Warren Buffett might be planning to invest in Japanese financial firms and shipping companies.
This speculation comes as Berkshire Hathaway, Buffett’s company, has made a move to return to the yen bond markets. Many think this indicates that he is raising money to invest in valuable stocks in Japan.
Berkshire Hathaway asked banks to help manage a yen bond sale in the global market. This is a sign that Warren Buffett could be looking to increase his investments in Japan. In his annual letter from February, Buffett mentioned that most of his previous investments in Japanese companies were financed through yen bonds.
Eiji Kinouchi, a chief analyst at Daiwa Securities, believes that insurers and shipping companies could be Buffett’s next targets. He noted that while trading companies saw a rise in value after the bond sale news, they did not outperform the broader market significantly.
Instead, stocks of shipping and insurance companies have been among the top performers in the Topix index since August, making them attractive options for Buffett’s value investment strategy.
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Buffett called the “Oracle of Omaha,” has a history of positively impacting markets. His endorsement of five major trading companies earlier this year helped push Japan’s Nikkei 225 Stock Average to a record high. If Buffett expands his investments into other sectors, it could provide strong support for a market that has faced significant volatility due to political uncertainty and currency changes.
Now valuations for Japanese banks and insurance companies have decreased following a major selloff in the wider market in August. The estimated price-earning ratios for the Topix insurance and bank indexes are now around 9 and 10.1, down from 12.1 and 12.4 in early July.
Takashi Ito, a strategist at Nomura Securities, believes that Buffett is likely to buy financial shares, stating that the fundamentals of Japan’s financial sector align well with Buffett’s investment standards. As the situation unfolds, investors will be watching closely to see what Buffett decides to do next in Japan.
