KUALA LUMPUR (April 6): The last few years saw multiple challenges that tested businesses’ financial resilience, from Covid-19 to the post-pandemic commodity and inflation shocks, which in turn spurred interest rate hikes that indirectly skewed global currency exchange trends.

The surprising good news coming out of this unprecedented series of events is that there is a notable improvement in the balance sheets of Malaysian public listed companies (PLCs), judging by their debt and cash positions (net gearing or net cash), according to data compiled by The Edge and Asia Analytica.

Higher net gearing or lower net-cash position does not necessarily equate to poor performance or management of a company, but companies with lower debt or higher cash pile have a bigger financial buffer, which will be useful in bad times.

The compiled data show that nearly half (47.6%) of companies that remained listed since 2019 have improved their balance sheets compared with pre-pandemic levels.

The Edge looks at the latest balance sheet trend of Bursa Malaysia-listed companies compared with 2022 and pre-pandemic levels, including those with the highest net cash or net debt position, as well as those with the highest net gearing ratio. We spoke to analysts to understand the reason behind such trends, and to economists on how to make sense of the data.

The cover story also looks into companies with perpetual bonds, which are commonly treated as equity, to see how they affect the gearing and profitability of issuers.

Which of the companies have seen improvements in their balance sheet positions based on the two metrics? What were the reasons for some companies gearing up or spending their cash? Which PLC issued perpetual bonds, and how much have been raised/redeemed in the past year?

To find out more on the balance sheet trend of Bursa-listed companies, grab a copy of The Edge Malaysia’s latest issue today.

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