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Japanese Market Thrilled as "Stock God" Issues Record-Sized Yen Bonds
Following his purchase of major trading houses that propelled Japanese stocks to new highs, Warren Buffett is once again gearing up with a significant bond issuance to prepare his "ammunition," with the market closely watching which stocks the "Oracle of Omaha" might buy next.
On Thursday, Berkshire Hathaway Inc. issued a multi-tranche bond worth 281.8 billion yen (approximately $1.89 billion), marking the largest yen bond transaction since the company's inaugural issuance in 2019.
The bond offering comprises seven tranches with maturities ranging from 3 to 30 years. Except for the 3-year portion, the other maturities offered higher premiums than the yen bond issuance in April.
This issuance also makes Berkshire Hathaway the largest foreign issuer of yen bonds this year, raising a total of 545.1 billion yen.
Asset Management One Co fund manager Haruyasu Kato stated, "The company's ability to raise such a substantial amount of funds within a year demonstrates investor confidence in Berkshire. This transaction also indicates strong demand for high-yield bonds among Japanese investors."
Most of Berkshire's investments in Japanese companies have been financed through the issuance of yen bonds. Earlier this year, Buffett's investment in Japan's five major trading houses propelled the Nikkei 225 index to a record high.
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The market is now watching which stocks Buffett might purchase, with some analysts speculating that the "Oracle of Omaha" might buy value stocks in banking, insurance, and shipping sectors.
Nomura analysis suggests that Buffett is more likely to buy financial stocks, especially after interest rate hikes by Japanese banks, which can help improve industry profit margins. Companies like Mitsubishi UFJ Financial Group and Sumitomo Mitsui Trust Holdings align with Berkshire's investment portfolio characteristics.
Daiwa Securities believes that insurance companies and shipping firms could be Buffett's next choice. Shipping and insurance companies have been leading the Tokyo Stock Price Index since August, potentially fitting Buffett's value investment strategy.
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