(Bloomberg) — A share-price surge in Japan’s trading houses triggered by Warren Buffett’s $6 billion investment is already fading, due to a lack of fresh catalysts and a downturn in commodity markets.

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Shares of two of the five “sogo shosha” — as the commodity-centric Japanese conglomerates are called — are now trading at or below levels before Buffett’s Berkshire Hathaway Inc. announced its stake purchase. The August announcement, among the largest-ever investments by Buffett in Japan, not only sparked a rally in stocks, but also boosted overall investor interest in the trading companies.

The failure of share prices to sustain the higher levels despite Buffett’s vote of confidence highlights the challenges faced by the shosha as the coronavirus pandemic erodes demand for commodities. It also speaks to the challenges for a Japanese equity market heavily weighted toward so-called value shares, with the benchmark Topix Index on track to lag the MSCI AC World ex-Japan Index for a fifth straight year in 2020.



chart, line chart: Japan's shosha are losing much of their Buffett-led gains


© Bloomberg
Japan’s shosha are losing much of their Buffett-led gains

Berkshire announced on the last day of August that it had bought stakes of about 5% in each of Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co. and Sumitomo Corp. That saw shares of all five firms jumping, with Sumitomo gaining more than 9% on the day.

As of Tuesday, Itochu and Sumitomo have given up all or most of their gains since the announcement. Only Mitsubishi remains substantially higher — with a 7.8% gain since, versus a 2.6% advance in the Topix index in that period.

“The Buffett purchase gave investors a chance to review the shosha stock prices, but since then, they’ve been sold as sentiment wasn’t as strong as hoped for,” said Yoshihiro Okumura, a general manager at Chibagin Asset Management.

Fueled by increased consumer product demands during the pandemic, Dallas-Fort Worth industrial building leasing set a record in the first nine months of 2020.

Warehouse and distribution tenants have gobbled up 21 million square feet of industrial space in North Texas through September.

Almost 5 million square feet of net leasing was recorded just in the third quarter, according to a new report from commercial real estate firm Cushman & Wakefield.

“The Dallas-Fort Worth industrial market continues to perform extremely well,” Cushman & Wakefield executive managing director Nathan Orbin said. “Even as concerns over the pandemic and an upcoming presidential election exist, demand remained strong,

“We anticipate demand to remain elevated as we are currently tracking over 14 million square feet of active tenant requirements.”

Expanding e-commerce and consumer products firms are driving the demand for North Texas warehouse space.

In the third quarter, some of the biggest leases were by Uline, a Wisconsin-based distributor of shipping, industrial and packaging materials that took 1.6 million square feet of space at DFW International Airport, and Amazon, which leased another 1 million square feet in southern Dallas. Encore Wire Corp added 724,380 square feet of distribution space in McKinney.

“E-commerce and the increasing demand for industrial product is driving the D-FW industrial market,” said Kurt Griffin, Cushman & Wakefield executive managing director. “D-FW has delivered close to 23 million square feet of industrial product year to date with another 24 million square feet under construction.

“However, tenant leasing is keeping up with new supply, maintaining a below historical level vacancy, which currently sits at 6.5%.”

Most of the ongoing industrial development is in southern Dallas County, in the AllianceTexas development area of North Fort Worth, at DFW International Airport and in South Fort Worth.

More than 23 million square feet of warehouse space is under construction in North Texas.
More than 23 million square feet of warehouse

(Bloomberg) — Hong Kong’s boom in initial public offerings is set to be prolonged as companies given a boost by the pandemic outbreak follow China’s technology giants in selling shares, the bourse’s head of listings said.



a person sitting on a bench in front of a body of water: Views of Hong Kong as China Law to Establish 'Red Lines' for the City, Adviser Says


© Bloomberg
Views of Hong Kong as China Law to Establish ‘Red Lines’ for the City, Adviser Says

Companies from the technology and biotechnology sectors could continue to fill the IPO pipeline in the near future as Covid-19 has boosted investments in research and development, Hong Kong Exchanges & Clearing Ltd.’s Head of Listing Bonnie Chan said in an interview on Friday.

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“We thought 2020 would be a disappointment, but it has turned out to be a busy year,” Chan, 50, said. “I believe the IPO rush will continue.”

Hong Kong this year has seen a rush of listings from Chinese companies including JD.com Inc. and Netease Inc., which are selling shares in the city to supplement New York listings amid growing tension between the U.S. and China. It’s now soon set to welcome Jack Ma’s fintech giant Ant Group, which is said to plan a $35 billion dual listing in Hong Kong and Shanghai.

Listings in Hong Kong have jumped 33% this year to HK$220 billion ($28.4 billion). In turn, the exchange’s shares have surged 47% so far in 2020.

The bourse anticipates that listings of companies in the retail and consumer industries will also return once the pandemic subsides, said Chan, who leads a team of more than 260 people to approve listings.

Ant, China’s biggest payments company, is waiting for a hearing with the Hong Kong stock exchange on approval for its listing, which was expected to have happened last week. It now faces added uncertainty stemming from a debate in Washington over restrictions on the payments behemoth.

Ant’s

With millions of Americans still sheltering in place and cooking their own meals, the grocery industry has been one of the few bright spots in an otherwise battered U.S. economy. Unless, that is, you are Whole Foods Market, the upscale chain acquired three years ago by Amazon.com.

Trips to Whole Foods in September were down 25% from a year earlier, according to Placer.ai, which tallies retail foot traffic from some 30 million mobile devices. Some of the decline is due to consumers consolidating shopping trips and buying more groceries online, but the traffic decline at Whole Foods is much steeper than at Walmart, Kroger and Trader Joe’s. Visits to Albertsons-owned stores, including Safeway, meanwhile, actually increased last month, compared with a year ago. And though Earnest Research estimates that Whole Foods sales (including online) rose by as much as 10% during the pandemic, some rivals are posting twice the gains.

“Everyone is buying more everywhere, but total customers are actually down for Whole Foods,” said Michael Maloof, who tracks consumer habits for Earnest Research. “Whole Foods is in a uniquely horrible place.”

Amazon doesn’t break out Whole Foods sales, so getting a complete picture of the chain’s travails is difficult. But few grocers were more awkwardly positioned for the pandemic, analysts say. The stores were rarely a one-stop destination before the outbreak even for fans. The company expanded its prepared meals sections for office workers seeking lunch or dinner on the go, but now those customers are homebound. And Whole Foods shoppers who have time to visit stores often confront long lines and aisles crowded with gig workers paid to fetch online orders.

Meanwhile, despite expectations that the world’s largest e-commerce company would use Whole Foods to re-invent food shopping, Amazon has opted to open a separate chain called Amazon

SINGAPORE/MANILA (Reuters) – Philippines’ Converge ICT Solutions Inc is targeting the country’s biggest initial public offering (IPO) after setting price terms to raise as much as $680 million, sources said, amid a boom in demand for fibre broadband during the pandemic.

FILE PHOTO: A Filipino online tutor wears a wig as he talks to students from a computer in the head office of 51Talk, as the spread of the coronavirus disease (COVID-19) continues, in Pasig City, Metro Manila, Philippines March 12, 2020. REUTERS/Eloisa Lopez

Converge, which is banking on higher internet demand for e-learning and working from home during the pandemic continuing, joins other companies in Malaysia and Thailand planning listings this month, signalling a revival in investor interest in Southeast Asia’s underperforming markets.

Converge has set the sale price at 16.50 to 19 pesos ($0.3406 to $0.3922) per share, sources with direct knowledge of the issue said on Monday.

At the upper end, it could raise as much as 32.87 billion pesos ($678.6 million), including the over-subscription option.

The country’s biggest IPO up to now was Robinsons Retail Holdings Inc RRHI.PS, which raised $627 million in 2013.

A Converge spokesman declined to comment.

“There’s quite a lot of excitement as this is one of the highest growth stories coming out of the Philippines,” said one source. The sources declined to be identified as they were not authorised to speak to media.

Seven cornerstone investors that had committed to buy shares include a Canadian pension fund, the sources said.

Morgan Stanley and UBS are global coordinators, while BPI Capital and BDO Capital are the joint local underwriters.

“Converge is in an industry that continues to grow by leaps and bounds in the pandemic,” April Lee Tan, research head at brokerage COL Financial in