Assuming that Sumitomo Mitsui Financial Group Inc. of Japan is considering increasing its position in the U.S. investment bank, Jefferies Financial Group Inc. shares soared on the news.
The chief executive of Sumitomo Mitsui, Jun Ohta, stated that he planned to make Jefferies an equity-method affiliate, which might entail a 20% to 50% stake, according to Nikkei, which later took down the reference to the percentage amounts in its story. Ohta didn’t specify when his company might make a further investment, but he did suggest that such choices would be made after his company had talks with U.S. regulators and New York-based Jefferies.
In a previous story, Ohta told Nikkei, “We’ve decided to proceed toward raising our shareholding,” which has since been changed to reflect the CEO’s wish. The Japanese corporation already owns almost 5% of Jefferies due to a strategic partnership established last year.
No immediate reaction was available from a Jefferies spokesperson, and Sumitomo Mitsui did not immediately answer a request for comment. Jefferies is expected to release its results for the fourth quarter on Monday.
On Wednesday afternoon, Jefferies stock rose to 19%, marking the most significant intraday gain since November 2008. In the last year, the stock has risen 54%.
He said our balance sheet is desirable to Jefferies, and their investment banking capabilities appeal to us. “I believe that Europe also has a lot of potentials. Our capacity for investment banking there is limited.
The Japanese bank is not the only one that thinks Jefferies is a good investment. At the same time that it reduced its holdings in financial stocks like U.S. Bancorp and Bank of New York Mellon Corp., Berkshire Hathaway Inc. purchased shares of the company. Jefferies was one of three new stakes made by Warren Buffett’s conglomerate in November, along with chipmaker Taiwan Semiconductor Manufacturing Co. and manufacturer Louisiana-Pacific Corp., and Berkshire controlled more than 433,000 shares of Jefferies as of September 30.
- Published By Team Genuine Reporter