Cash is king!

Below NAV: About 60% of the 925 companies listed on Bursa Malaysia are currently trading below their respective net asset values and are easy target for privatisation or for a merger and acquisition strategy. — AP

WITH the market going into a corrective mode following rising uncertainties due to the US-China trade war, flight to safety has indeed been the theme since the beginning of the month as we saw global bond yields falling to levels depicting crisis like environment as central banks race to the bottom in cutting rates.

Yield inversion is becoming a common occurrence as negative yielding papers breached the US$15 trillion mark globally. What do investors do in an environment of uncertainties other than rushing to zero yielding assets like gold or raising their cash positions? One of the ideas is of course positioning in cash rich companies or even in companies where there could be potential privatisation or a merger and acquisition activity as surely the offer price would be attractive enough for investors to profit from a calculated position of entry.

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