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Dubai International Capital takes Sony stake

TOKYO - Dubai International Capital, a private equity company owned by the ruler of Dubai, said it has made a ‘substantial investment’ in Sony Corp, boosting the shares of the Japanese electronics and entertainment firm.

The value was not available, but Dubai International Capital said in July it might buy stakes of up to $1.5 billion in one or two publicly listed companies in Japan.

A $1.5 billion investment would be equivalent of a 3 percent stake in Sony, which has a market value of 5.52 trillion yen ($50.9 billion).

This is Dubai International Capital’s first investment in a Japanese company.

The announcement followed a newspaper report that the Chinese government’s investment arm was likely to pick up shares in Tokyo, stoking hopes that foreign investors may be stepping up investments in Japan, which briefly boosted the yen.

‘I personally have not heard overseas investors making positive comments on Japanese stocks in recent months and recent years,’ said Kazuya Nakamura, deputy general manager at Norinchukin Zenkyoren Asset Management.

‘These could be signs that (foreign investors’ views on Japanese stocks) are changing.’

The report by the Nikkei business daily that China’s new sovereign wealth fund, which manages about $200 billion of foreign reserves, was likely to invest in Japanese stocks gave a brief boost to the yen and lifted Tokyo stocks.

Dubai International Capital did not disclose the size or timing of its Sony investment, but anyone who buys more than 5 percent of a listed company is required to report the stake to regulators within five business days.

After the announcement, Sony shares closed up 4.6 percent at 5,500 yen on Monday, outperforming the Tokyo stock market’s electrical machinery index IELEC, which rose 1.95 percent.

‘Whilst the restructuring process at Sony is well advanced, the recent successful listing of Sony Financial Holdings is evidence of management’s ongoing strategy of focusing on capital efficiency and cash generation,’ Dubai International Capital Chief Executive Sameer Al Ansari said in a statement.

Sony, which is in the final year of its three-year turnaround plan led by Chief Executive Howard Stringer, took Sony Financial public in October in its latest step to focus on its core operations such as the consumer electronics business.

The maker of the PlayStation 3 game console and Bravia flat TVs said last month it swung to a quarterly operating profit thanks to strong sales of PCs and digital cameras and a weaker yen, and it raised its full-year forecast.

The Tokyo-based company was already owned 52.6 percent by foreign investors as of the end of September.

Other recent purchases of Dubai International Capital, which manages about $12 billion of assets, include German-based speciality alumina products company Almatis and a 9.9 percent stake in US hedge fund Och-Ziff Capital Management.