Given the recent yo-yo mood swings in the equities market, stockbrokers Asia Securities says punters should now focus on a companys cash reserves as a litmus test before investing.
The market is presently highly volatile, low priced endash in absolute terms endash shares, with at times questionable earnings quality and balance sheet strength, and in view of the continuing, if not actually increasing, political and economic uncertainty, Asia Securities believes that the moment is opportune for a focus on quality, and in particular, on cash. rn
rnWhile revenues, net profit and earnings before interest and tax can be manipulated, cash is the one measure of financial well-being that can be relied upon by investors in testing times. rn
rnCompanies with above average net cash per share offer the potential for attractive dividends as well as the ability to consider acquisition opportunities in a rising interest rate environment.rn
rnScreening the Colombo bourse for potential companies where cash is ki