By Eli Greenblat
In the span of a fortnight from late July to the end of this week, Australia’s biggest listed companies representing the mining, financial services and telecommunications sectors promised to shower shareholders with more than $25 billion in dividends, special dividends and share buybacks.
To put that 14-day cash splash into some context, it is equivalent to almost three years of planned infrastructure investment pledged by the federal government in the recent budget, easily beats the $18bn announced to overhaul the nation’s scandal-ridden aged-care system and is around half the initial $56bn in JobKeeper payments that saved millions of jobs last year.
Australia’s corporate balance sheets have never been stronger, bulging with cash, they are scooping up cash with buckets and tipping them over investors.
Lead portfolio manager at WAM Capital, Oscar Oberg, said with lockdowns kicking off at the end of June, most of the companies his funds were investing in had strong balance sheets and had racked up good performances through fiscal 2021.
“I think generally, typically for the small-cap industrial companies we follow, we think outlook statements will be pretty tempered, you might not even see any, retailers have had a hard eight week period obviously.
“It will be messy from that respect, but I think corporate Australia generally are positioned where balance sheets are a lot better that we probably all would have envisaged so we do see the potential for M&A and the role of private equity.”
Read more in The Australian.