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Buffett’s Berkshire buys sizable new Exxon stake

NEW YORK — Mr Warren Buffett’s Berkshire Hathaway yesterday (Nov 14) disclosed a new US$3.45 billion (S$4.3 billion) stake in Exxon Mobil, after buying 40.1 million shares in the world’s largest publicly traded oil company.

Although the investment represents just 0.9 per cent of Houston-based Exxon’s shares, analysts said it reflects strong support by the second-richest American of one of the world’s largest and most profitable companies.

“When Warren Buffett gives his seal of approval to any company, that is never a bad thing,” said Mr Pavel Molchanov, energy analyst at Raymond James & Associates, who rates Exxon shares a “strong buy”

Exxon shares rose 84 cents, or 0.9 per cent, to US$94.06 in after-hours trading following Berkshire’s disclosure of its stake in a US Securities and Exchange Commission filing that listed most of its equity investments as of Sept 30. The shares had risen 63 cents during regular trading.

“He likes buying big, established global brand names, and Exxon is a good flight-to-quality stock,” said Mr Fadel Gheit, senior oil analyst at Oppenheimer & Co, referring to Mr Buffett. “The stock has also lagged the market in the last three and five years. That makes it a typical Warren Buffett holding.”

Mr Gheit has a “perform” rating on Exxon.