Cover Image

Robustness of cash flow value: investment in ASEAN

This study examines the different roles of cash flow in assessing investment returns in the Association of Southeast Asian Nations (ASEAN). The analysis covers over 900 listed firms across Malaysia, Indonesia, Philippines, Singapore and Thailand for the period post the Asian financial crisis of 2001...

Full description

Saved in:
Bibliographic Details
Main Authors: Lau, Wei Theng, Mahat, Fauziah
Format: Article
Language:English
Published: Korea Distribution Science Association 2019
Online Access:http://psasir.upm.edu.my/id/eprint/82040/1/Robustness%20of%20cash%20flow%20value%20investment%20in%20ASEAN.pdf
http://psasir.upm.edu.my/id/eprint/82040/
Tags: Add Tag
No Tags, Be the first to tag this record!
id my.upm.eprints.82040
record_format eprints
spelling my.upm.eprints.820402020-09-04T02:47:02Z http://psasir.upm.edu.my/id/eprint/82040/ Robustness of cash flow value: investment in ASEAN Lau, Wei Theng Mahat, Fauziah This study examines the different roles of cash flow in assessing investment returns in the Association of Southeast Asian Nations (ASEAN). The analysis covers over 900 listed firms across Malaysia, Indonesia, Philippines, Singapore and Thailand for the period post the Asian financial crisis of 2001-2017. Firm-level panel data analysis shows that cash flow factors are important in all contexts of cash return on assets, earnings quality and market value multiple across the region even after controlling for typical measures of profitability. The results suggest that firms should manage cash flow prudently in considerations of firm value from the shareholder’s perspective, measured directly using stock return. Cash profitability on assets should become an important firm performance indicator, whilst higher cash component over reported earnings is preferred. The market also tends to respond favourably to cash flow yield as a price multiple in valuation, outpacing the role of earnings yield. Such findings are robust across the pre and post subprime crisis periods, across estimation methods pertaining to finance panel standard errors, as well as across static and dynamic considerations of returns. It is hence sensible to consider cash flow factors in the research pertaining to asset pricing and factor investing in the ASEAN region. Korea Distribution Science Association 2019 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/82040/1/Robustness%20of%20cash%20flow%20value%20investment%20in%20ASEAN.pdf Lau, Wei Theng and Mahat, Fauziah (2019) Robustness of cash flow value: investment in ASEAN. Journal of Asian Finance, Economics and Business, 6 (2). pp. 247-255. ISSN 2288-4637;ESSN: 2288-4645 10.13106/jafeb.2019
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description This study examines the different roles of cash flow in assessing investment returns in the Association of Southeast Asian Nations (ASEAN). The analysis covers over 900 listed firms across Malaysia, Indonesia, Philippines, Singapore and Thailand for the period post the Asian financial crisis of 2001-2017. Firm-level panel data analysis shows that cash flow factors are important in all contexts of cash return on assets, earnings quality and market value multiple across the region even after controlling for typical measures of profitability. The results suggest that firms should manage cash flow prudently in considerations of firm value from the shareholder’s perspective, measured directly using stock return. Cash profitability on assets should become an important firm performance indicator, whilst higher cash component over reported earnings is preferred. The market also tends to respond favourably to cash flow yield as a price multiple in valuation, outpacing the role of earnings yield. Such findings are robust across the pre and post subprime crisis periods, across estimation methods pertaining to finance panel standard errors, as well as across static and dynamic considerations of returns. It is hence sensible to consider cash flow factors in the research pertaining to asset pricing and factor investing in the ASEAN region.
format Article
author Lau, Wei Theng
Mahat, Fauziah
spellingShingle Lau, Wei Theng
Mahat, Fauziah
Robustness of cash flow value: investment in ASEAN
author_facet Lau, Wei Theng
Mahat, Fauziah
author_sort Lau, Wei Theng
title Robustness of cash flow value: investment in ASEAN
title_short Robustness of cash flow value: investment in ASEAN
title_full Robustness of cash flow value: investment in ASEAN
title_fullStr Robustness of cash flow value: investment in ASEAN
title_full_unstemmed Robustness of cash flow value: investment in ASEAN
title_sort robustness of cash flow value: investment in asean
publisher Korea Distribution Science Association
publishDate 2019
url http://psasir.upm.edu.my/id/eprint/82040/1/Robustness%20of%20cash%20flow%20value%20investment%20in%20ASEAN.pdf
http://psasir.upm.edu.my/id/eprint/82040/
_version_ 1677783018426597376
score 13.211869

Similar Items