Key Points:
- Major tech companies like Apple and Google have strong cash reserves and balance sheets for flexibility in mergers & acquisitions, tax benefits, and as insurance against tough times.
- With eased monetary policies, interest payment burdens decrease, and potential dividend payments increase.
- Investment Recommendation: DBS suggests investing in USD funds with exposure to Big Tech companies to maximize profit potential.
Get ready to dive into one of the signals from the latest DBS CIO Insight release for Q3 2024. This time, we're talking about Big Tech companies that are currently "saving" a lot of cash.
What Does It Mean That Big Tech Has Strong Cash Reserves and Balance Sheets?
Imagine you're walking around a mall and see someone carrying lots of shopping bags. Well, big tech companies like Apple and Google are doing something similar—they have many "bags of cash" they're saving up. Why are they doing this? Here are a few reasons, quoted from the Harvard Business Review:
- Flexibility for Mergers and Acquisitions: Just like you save money for end-of-year sales, big tech companies need cash on hand to buy other companies or make acquisitions that could benefit them.
- Tax Benefits: By keeping strong cash reserves and balance sheets, they can obtain certain tax advantages. It's like finding ways to avoid high taxes yourself.
- Insurance for the Future: This is crucial, especially for smaller companies. Saving cash reserves can act as insurance in case of unexpected events. They have backup funds to face tough times.
What Impact Does This Have on Your Investment Plan?
Here are some key points you need to know to take advantage of this opportunity:
- Reduced Interest Payment Burdens: When monetary policies are eased, companies' interest payment burdens decrease. This means they can focus more on growth and development.
- Higher Dividend Payments: With lots of cash, big tech companies have the potential to provide higher dividend payments to shareholders. It's like getting a year-end bonus that makes you smile!
DBS Experts' Recommendations
After analyzing this signal, the experts at DBS recommend you consider investing in USD funds with exposure to Big Tech companies. With this strategy, you can enjoy potential profits from the steps these companies are taking. Here are some products you might consider:
- BNP Paribas DJIM Global Technology Titans 50 Syariah USD
- Batavia Technology Sharia Equity USD
- Bahana US Opportunity Sharia Equity USD
Start Investing with the digibank by DBS App
To join the investment in these companies, you can use the digibank by DBS App! Find mutual fund options in sectors related to Big Tech. Additionally, if you need further guidance on investment strategies, you can contact a digibank Advisor. They can also provide recommendations on choosing the right investments to match your financial goals.
This is just one of many signals and recommendations captured and analyzed by the experts at DBS. With this information, you can be more confident in aiming for profit. Let's start your investment journey with the digibank by DBS App and maximize your investment returns.
