US billionnaire investor Warren Buffett said today that a massive natural disaster would not hamper the future of the Japanese economy and could prompt a new bout of stock buying.
'I'm not looking at Japan's economic future differently from 10 days ago - extraordinary events offer a buying opportunity,' he said.
Buffett, the chairman of investment firm Berkshire Hathaway, was visiting South Korea to attend a ground-breaking ceremony for a local unit of Israel's Iscar Metalworking Companies, 80% owned by Berkshire Hathaway.
Japan's Nikkei index lost around 10% in the week following the devastating March 11 quake and tsunami. Buffett, however, urged against selling Japanese stock and said Japan would recover relatively quickly, Yonhap news agency said.
The disaster could cost the Japanese economy up to $235 billion, the World Bank said today. Growth, however, should pick up in subsequent quarters 'as reconstruction efforts, which could last five years, accelerate', it said.
Buffett, known as the 'Oracle of Omaha' for his investment savvy, said today that Berkshire was seeking further acquisitions worldwide including South Korea following its $9 billion purchase of US lubricant maker Lubrizol.
'We're looking at a number of big businesses in Korea, the US, the UK. We hope to find good companies wherever they may be. Basically, it's the bigger, the better,' he said.
Quake has cost Swiss Re at last $1.2 billion
Reinsurance giant Swiss Re today estimated that Japan's earthquake and tsunami have cost it some $1.2 billion (€847m), but said this figure could be revised upwards.
'Based on preliminary estimates, Swiss Re expects its claims for the earthquake and the tsunami, net of the benefits of retrocession, to be approximately $1.2 billion before tax,' the group said in a statement.
'Our claims estimate is subject to a higher than usual degree of uncertainty, and may need to be subsequently adjusted,' it warned.
The determination of actual claims would require several months given the widespread destruction from the 9.0 magnitude earthquake and devastating tsunami that struck Japan on March 11, the Zurich-based reinsurer said.
An ensuing nuclear crisis at the Fukushima number one plant is, however, unlikely to lead to significant loss for the insurance industry as coverage for such facilities in Japan excludes earthquake shock, as well as fire following an earthquake and tsunami, Swiss Re said.
Neither would it be affected by residential properties claims arising from the earthquake and tsunami as these are reinsured locally. Rather, claims for the reinsurer are expected to arise from commercial and industrial risks. It would also have to pay out residential claims coming from fire following the earthquake.
The group added that it has donated towards relief efforts and pledged to help rebuilding efforts. It is also matching any contributions from employees.
