April 4 Reuters Shares of Asian companies with big cash balances are outperforming the broader market and analysts say the money will be a cushion against volatility and earnings downgrades.

The shares of the top 300 listed Asian companies based on their net cash levels have risen about 9 this year, according to Refinitiv data, compared with the MSCI Asia Pacific share index39;s 4.6 gain.

Cash implies safety amidst the volatility we have seen to start the year, said Vikas Pershad, investments portfolio manager for Asian Equities at MG Investments.

It is understandable that investors would be allocating more capital to companies with aboveaverage cash balances, and would be taking capital away from companies with heavy balance sheets, he said.

A balance sheet buffer can offer protection against rising borrowing costs and be a ready source of funds for buybacks, dividends or investment in future growth and can come in handy as rates go up and markets turn fickle and jittery.

A healthy balance sheet is a prerequisite for us, said Pershad.

Cash levels do not necessarily drive stock performance alone, though strong balance sheets have enhanced the appeal of shares in companies such as China Mobile, Samsung Electronics and TSMC since the start of 2023.

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…