TOKYO—An American mutual-fund company has become the largest shareholder in Nintendo Co., placing a growing bet on signs of a revival in the Japanese videogame company’s fortunes, a regulatory filing shows.
Capital Research & Management, the investment adviser to the American Funds family, owned a 16.4% stake in Nintendo as of this week, according to a filing with Japan’s Finance Ministry. That was up from 15.3% in early March.
A surge of foreign investment has driven the Nikkei Stock Average to near its highest levels in 15 years, and Nintendo has been one of the biggest beneficiaries of late. Since February its shares have risen more than 80%.
While Third Point is known for its activist stance, Capital Research & Management is a quieter investor. The company said in the filing that the purpose of the investment in Nintendo was to generate “profits for customers in and outside of Japan.”
http://www.wsj.com/articles/u-s-mutual-fund-becomes-top-nintendo-shareholder-1432277440
Capital Research held 15.29 per cent of all Nintendo stock back on March 10. It bought more shares after Nintendo announced March 17 that it has joined forces with mobile app company DeNA to produce games for smartphones. Foreign investors are counting on Nintendo to take full advantage of its wealth of popular characters to generate profit in the new market, according to Daiwa Securities analyst Satoshi Tanaka.
Nintendo shares are sitting at a roughly four-year high due to expectations that its smartphone games will add to earnings. "Capital Research may continue to buy more stock, which might prop up the price," says Tanaka.
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