Listed companies’ ‘idle money management’: Stability is the fundamental risk that needs to be cautious

On December 25th, for listed companies, using idle funds for investment and wealth management is like a double-edged sword, which can bring certain returns but also hidden risks. According to incomplete statistics, since December, over a hundred A-share companies have disclosed announcements regarding their intention to use their own funds for entrusted wealth management or securities investment. The reporter found that currently, the “idle money” in the hands of listed companies tends to purchase low-risk, high liquidity, and stable income wealth management products. Some companies prefer securities investment, while others balance both; The specific investment amount varies depending on each company’s financial resources, ranging from tens of millions to billions of yuan (upper limit). For investment purposes, most companies aim to improve the efficiency of fund utilization and increase capital returns, in order to seek more investment returns for the company’s shareholders. However, there has always been controversy in the market regarding the “idle money wealth management” of listed companies. Undoubtedly, the rational use of idle funds for financial management has many benefits for listed companies, but potential risks should also be prevented. Industry insiders say that relevant listed companies need to pay attention to the financial losses and liquidity risks caused by investment failures, as well as excessive reliance on financial management, neglect of the company’s main business development, and non-standard use of financial management funds, which will pose challenges to the high-quality development of the company. (Shanghai Securities News)

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