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Sony stock hits 2019 high on hopes of Third Point stake increase

Huawei sanctions reprieve eases concerns over chip sales

Sony's Tokyo headquarters: Shares in the Japanese group have rallied on expectations that activist hedge fund will raise its stake.   © Reuters

TOKYO -- Sony shares touched a year-to-date high Friday and closed higher for a fifth straight session after activist U.S. hedge fund Third Point hinted it could increase its stake in the Japanese conglomerate.

The Tokyo-listed stock rose as high as 5,976 yen before ending the day up nearly 1% at 5,950 yen, with a 15% increase in trading volume from the previous day.

The rally continued after Third Point head Daniel Loeb told Nikkei in an interview published Thursday that the fund could buy more Sony shares if the price went down.

Loeb revealed a $1.5 billion stake in the company in a letter to investors late last month in which he urged Sony to spin off its semiconductor unit.

Hopes for a resumption of U.S.-China trade talks have also buoyed the stock.

U.S. President Donald Trump said June 29 after a meeting with Chinese counterpart Xi Jinping that Washington would ease restrictions on doing business with Huawei Technologies, allowing some products that incorporate American technology to be sold to China's top telecommunications equipment maker. 

The ban had raised concerns for Sony, which supplies image sensors to smartphone makers including Huawei.

The partial reprieve has boosted other Japanese electronics shares as well. Taiyo Yuden, a maker of capacitors and other components, has gained 9% since the end of last week, while larger peer Murata Manufacturing has climbed 4%.

With concerns about U.S.-China trade tensions assuaged for now, retail investors have moved to unwind bets against these stocks, said Shinichi Tamura, a strategist at Matsui Securities.

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