New York - Hillary Clinton supporter Warren Buffett’s Berkshire Hathaway could get a $29bn (R399.32bn) boost to its book value under tax-rate cuts advocated by President-elect Donald Trump, according to Barclays.
“We would view this magnitude of increase as favourable for Berkshire shares since it is generally valued on price to book value,” Barclays analysts led by Jay Gelb said in a note to investors on Monday.
Berkshire has jumped about 8% in New York trading since Trump won the November 8 election, helped by the increasing value of Buffett’s holdings in bank stocks as interest rates climbed. The prospect of lower taxes is also helping. Gelb’s analysis covered a net deferred tax liability of about $50.4 billion at the end of 2015, a figure that includes potential costs if Buffett sells investments that gained in value.