Warren Buffett, the 'master of investment,' has publicly expressed his confidence in Japanese general trading companies, attracting individual investors in Japan to related stocks.
Bloomberg reported on the 4th (local time) that major Japanese general trading companies such as Mitsubishi Corporation, Mitsui & Co., Marubeni, and Sumitomo have become popular among individual investors as value investment targets thanks to high dividends, stable business structures, and shareholder-friendly governance reform efforts.
Along with the expansion of the tax-free savings account (NISA) introduced by the Japanese government to encourage individual stock and fund investments, general trading companies are changing the retail investment flow that was previously centered on financial stocks. According to SBI Securities, Mitsubishi Corporation rose to the third most popular stock among NISA-targeted stocks since March, driving retail investment demand. In particular, despite U.S. President Donald Trump's tariff policy in April, the stock price achieved better performance than the market, which was further accelerated by Buffett reaffirming his long-term holding policy for Japanese general trading companies.
In terms of expected dividend yield, the attractiveness is significant. The 12-month expected dividend yields for Mitsubishi, Mitsui, Sumitomo, and Marubeni all exceed 3.5%, significantly outpacing the average of the TOPIX index at 2.7%. Itochu shows a slightly lower yield, but has demonstrated a clear commitment to returning profits to shareholders by doubling its dividends over the past five years.
The Japanese stock market is encouraging the influx of small investors through corporate governance reforms such as stock splitting. The Tokyo Stock Exchange is working on plans to lower the minimum investment amount considering that the trading unit is 100 shares, and both Mitsubishi and Mitsui have already proven this effect through stock splitting.
Buffett's influence extends beyond short-term benefits. Phillip Securities Japan evaluated that the increased participation of individual investors will create a stable shareholder base in the medium to long term. In particular, his long-term investment philosophy is enhancing confidence in general trading company stocks, serving as a driving force for expanding dividends and promoting governance reform among corporations. In fact, general trading companies are strengthening their shareholder return policies based on stable performance and cash flow, making them more attractive to long-term holding investors.
However, there are challenges that arise as the number of individual investors increases. As the number of accounts grows, the administrative burden, such as managing shareholder meetings, also increases. In reality, after the reform of the NISA system, the number of NISA accounts in Japan surpassed 25.6 million, and the amount newly invested through these accounts last year reached approximately 11.75 trillion won.
Nevertheless, global financial firms are optimistic about the Japanese stock market. Herald van der Lindt, a researcher at HSBC, analyzed in a report that 'if just 1% of the cash assets held by Japanese investors were moved to the stock market, approximately 302 trillion won could flow in.'