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Singapore-listed companies may face increased pressure next year to return excess cash to shareholders, says UBS, according to Dow Jones.
“Given that the cost of debt is now near a record low, we think pressure for companies, especially cash-generative ones, to undertake some form of capital management exercise via dividend hikes or share buybacks will rise,” says UBS.
Research house forecasts Singapore market’s net gearing to fall to 8.7% by 2011 from 21.0% in 2007.
Says companies with track record of capital management during previous episodes of low growth, low interest rates, and have net cash or high projected free cashflow yields in 2011 include Singapore Exchange (S68.SG), Singapore Press Holdings (T39.SG), Singapore Post (S08.SG), M1 (B2F.SG), Starhub (CC3.SG), SingTel (Z74.SG), SATS (S58.SG), SembMarine (S51.SG), Keppel Corp. (BN4.SG), Venture (V03.SG), Cosco (F83.SG).
