Rated Asian corporates cash rich with about US$230B- Moody's

The ratings agency said that rated non-financial corporates ave been building their positions for expansion, acquisitions and liquidity despite noises over global economic conditions.

"Rated Asian corporates -- which in this case exclude those in Australia and Japan -- have built up cash holding of about USD230 billion,compared to nearly USD1 trillion by US corporates. However, while the amount held by Asian companies appears smaller, the average amount per corporate is almost double that of the US companies," says Elizabeth Allen, a Moody's Vice President and Senior Credit Officer.

The Moody's estimates are based on a rated sample of about 120 Asian corporates which published interim financial position, compared to about 1,200 in the US.

"From end-2008 to mid-2010, their cash holdings rose by almost 60%, mainly on improved operating performances and additional debt raising," Allen said on the release of a new Moody's report -- which she authored -- on their cash positions.

"Indeed, the balance sheets of Asian corporates are in good shape, and the speedy recovery of the Asian economies, coupled with a temporary halt in expansion spending, has allowed companies to accumulate cash over the last 12-18 months," Allen added.

"Moreover, Asian corporates have historically maintained higher cash balances than their US counterparts, and continue to do so. This is partly a cultural practice and partly a reflection of the lower reliance on committed credit facilities in Asia," Allen said.

This Moody's report discusses how cash balances have changed since 2007, and identifies the most cash-rich companies and sectors. It also discusses the sources and the potential uses of the cash, and compares the situation to that in the US.

The new report notes that cash in Asia's emerging markets is concentrated in the hands of the region's top corporates, with the leading 15 accounting for about 60% of the total.