Berkshire Hathaway raises stakes in Japan’s trading houses

Good morning and welcome back to FirstFT Asia. In today’s newsletter:

• Berkshire raises its stakes in Japan’s trading houses

• Trump hints at potential summit with China’s Xi

• How Jack Ma’s Alibaba staged a comeback

Warren Buffett’s Berkshire Hathaway has raised its stakes in Japan’s five biggest trading houses after negotiating to remove a 10 per cent ceiling for its investment in businesses known for trading everything from noodles to natural resources.

The US investment conglomerate has increased its shareholding in Mitsubishi Corporation from 8.31 per cent to 9.67 per cent, and in Mitsui from 8.09 per cent to 9.82 per cent, according to filings with Japan’s securities regulator published yesterday. It also lifted its stake in Itochu, Marubeni and Sumitomo Corporation by about a percentage point.

The trading houses are vital to Japan as importers of raw materials such as oil, gas, iron ore and copper and for supporting the country’s car, electronics and machinery export sectors.

In his annual shareholder letter last month, Buffett outlined plans to hold the stakes for “many decades” and praised the companies for their similarity to Berkshire, which started as a textiles manufacturer before becoming a sprawling investment conglomerate.

Read more about the Oracle of Omaha’s big bet on Japanese trading houses.

Here’s what else we’re keeping tabs on today:

• Economic data: Hong Kong reports February labour market figures.

• Trump-Putin talks: The two leaders hold a call today over the Russia-Ukraine war. Ahead of the talks, Putin allowed a group of western investors to offload Russian securities left in limbo by Russia’s invasion of Ukraine.

• Japan monetary policy: The Bank of Japan begins its two-day March meeting. Here’s what to look out for ahead of Wednesday’s rate decision.

Join FT experts next Thursday for a subscriber-only webinar, as they discuss Ukraine’s future with Russia’s full-scale invasion entering its fourth year. Register for free.

Five more top stories

1. Donald Trump has said China’s President Xi Jinping would soon visit the US, marking the strongest hint yet about a summit at a time when the economic superpowers are locked in a deepening trade war. One analyst said a near-term visit would be “a coup” for Trump, but added that Xi was unlikely to agree unless there was a secret bilateral channel that gave him confidence to risk a visit. 

2. China has announced a plan to “vigorously boost” domestic consumption as Beijing battles to reverse weak confidence and deflationary pressures in the world’s second-largest economy. President Xi Jinping’s government will focus on raising incomes, stabilising the real estate markets and improving medical and pension services.

3. HSBC and UBS are expanding their wealth management arms in India to compete with local rivals after a listings boom minted a new class of millionaires. The Swiss bank is looking to acquire shares in one of India’s largest wealth management companies 360 ONE, said two people familiar with the matter, while HSBC announced in January it would nearly double its branches in India.

4. The EU is launching an investigation into the aluminium market to protect the bloc’s beleaguered industry from a surge in cheap imports displaced by Trump’s tariffs. The European Commission will announce the probe, aimed at verifying a sudden rise in imports and covering all trading partners, on Wednesday, according to a document seen by the FT.

5. Partners at US law firm Kirkland & Ellis took home more than $9mn last year on average amid a recovery in dealmaking. Kirkland, known for its ties to the biggest private equity clients, boosted revenue by 22 per cent to a record $8.8bn, sealing its position as the world’s largest law firm.

The Big Read

Over the past three years Jack Ma has quietly presided over a strategic turnaround at Alibaba — spending lavishly on chips and hiring researchers by the dozen — that investors are betting puts his internet empire in a leading position in China’s push to roll out AI nationwide. The FT interviewed more than two dozen current and former Alibaba employees, business partners, competitors and analysts who helped shed light on Ma’s remarkable comeback.

We’re also reading . . . 

• How Trump could destroy his own movement: The US president and his followers are entering new and dangerous territory, writes Gideon Rachman.

• Australian election: Rising energy bills have become symbolic of a wider political debate ahead of a vote likely to be held in mid-May.

• End of Europe’s ‘peace dividend’: European countries collectively saved hundreds of billions of euros a year in recent decades as they drove down defence spending. They now face a brutal reckoning.

Chart of the day

Donald Trump’s trade war is taking a “significant toll” on the global economy, the OECD warned in its interim outlook. The Paris-based organisation cut growth forecasts for a dozen G20 countries and said inflation will be stickier than previously expected.

Take a break from the news . . . 

Across London, century-old underground public toilets are being converted into bars, cafés and shops. Would you eat your avocado toast in an old Victorian loo?