Warren Buffett's stamp of approval helps Japan's Mitsubishi shed conglomerate stigma

investing.com:

By Anton Bridge and Miho Uranaka

TOKYO (Reuters) — Warren Buffett's vote of confidence in Japanese trading houses is helping Mitsubishi Corp overcome long-held investor wariness about its complex global business that covers everything from sausages to natural gas, a top executive said.

Japan's largest trading house has seen heightened interest from potential investors since Buffett's Berkshire Hathaway (NYSE:BRKa) took a stake in 2020 that it later increased, Kenji Kobayashi, Mitsubishi's chief stakeholder engagement officer, told Reuters.

«Until fairly recently, being an industrial conglomerate had negative connotations,» Kobayashi said in an interview. «More people will come to meet a company Berkshire has invested in. The hurdles have come down significantly.»

The Berkshire investment in Mitsubishi and rivals Itochu, Marubeni, Mitsui and Sumitomo has also focused global attention on Japanese stocks in general and coincided with a push by the Tokyo Stock Exchange for improved use of capital that has seen companies boost dividends and buy back shares.

The result has put Japanese equities soundly back in fashion for the first time in years, as investors bet that more companies are serious about improving governance and returns.

The Nikkei has jumped 29% so far this year, outperforming both the S&P 500 and the FTSE 100. Tellingly, the index has also hit its highest since 1990 — near the peak of the asset bubble when Japan was still a more dominant force in the global economy.

Attitudes about the need to engage with external stakeholders — including investors — are now changing rapidly in Japan, at least among larger firms, Kobayashi said, highlighting how Japan Inc has become less insular in recent years.

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