China Mobile is up 37% this year as investors like its high dividends and growth potential. Chipmakers Samsung Electronics and Taiwan Semiconductor Manufacturing Co also hold high cash and have been rebounding on hopes that chip demand will pick up.
By contrast Asia's top 300 holders of net debt, about a
quarter of which are real estate firms, mostly in China's
beaten-down property market, have risen just 0.2% this year.
Nomura said Asian investors could find insulation from
recession risks by looking for cash-rich companies likely to be
able to sustain dividends or buybacks even in tough times.
For Nomura, such a strategy, which the brokerage calls BCD
or buybacks, cash, and dividends, has outperformed the MSCI Asia
Pacific index by 60% since the index's inception in May 2019, it
said.
There are signs it is a popular theme, with the Global X
Asia Pacific High Dividend Yield ETF , which invests in
companies that provide high and stable dividends, up 6.6% this
year.
Even though March brought the steepest bond rally for years,
something that usually supports growth stocks as yields become
less attractive, BNP Paribas' Asia-Pacific head of equity
research, Manishi Raychaudhuri, sees safety commanding a premium
for a while yet.
"Our search for deep value now takes us to stocks that have
more net cash on their balance sheets than their market cap," he
said.
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Performance of Asia’s cash rich firms vs the broader index ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Patturaja Murugaboopathy and Gaurav Dogra in
Bengaluru: Editing by Tom Westbrook and Susan Fenton)
