Stashing the cash

chart of the month

nov04-chart-gif

Since the cash-strapped days of 2002, the cash on European company balance sheets has been growing at a rate of 10–15% each year. As UBS’s chart shows, cash as a percentage of total assets on corporates’ balance sheets is predicted to end the year at around 11%, compared with 8.5% in 2002. UBS also predicts the ratio will increase further to 12.6% by the end of next year: a position that George Bory, head of credit strategy at UBS in London, believes “does not seem sustainable going forward”