Which FTSE firms are strong in the Asia and Pacific region?
In this first part of our review of the Asia and Pacific region we focused on the mining story. We now turn our attention to companies in a wide range of other sectors that offer investors good exposure to the region.
Unlike the regions covered previously in the series -- Latin America, Africa & Middle East, and Russia & East Europe -- the Asia and Pacific region includes several countries which the FTSE classifies as developed rather than emerging markets, namely Australia and New Zealand, and Hong Kong, Japan and Singapore.
The presence of developed markets in the Asia and Pacific region, as well as the fact that the region includes two parts of the BRIC (Brazil, Russia, India and China) quartet, probably accounts for the fact that there are more UK companies generating significant revenues in this region than in any of the other regions we've looked at.
The nine companies in the table below all belong to the FTSE 100 and derive in excess of 20% of their revenues from Asia & Pacific:
| Company | Business
sector | Revenue from
Asia & Pacific
(£m) | Revenue from
Asia & Pacific | Revenue from
outside Europe
& N America |
|---|
| Cairn Energy (LSE: CNE) | Oil & Gas | 205 | 100% | 100% |
| Standard Chartered (LSE: STAN) | Banking | 6,299 | 67% | 88% |
| Intertek (LSE: ITRK) | Support Services | 461 | 37% | 37%+ |
| International Power (LSE: IPR) | Electricity | 1,497 | 31% | 37% |
| Rolls-Royce (LSE: RR) | Aero & Defence | 3,086 | 30% | 34% |
| Schroders (LSE: SDR) | Asset Manager | 274 | 29% | 29% |
| HSBC (LSE: HSBA) | Banking | 13,721 | 27% | 44% |
| Br Am Tobacco (LSE: BATS) | Tobacco | 3,270 | 23% | 72% |
| Johnson Matthey (LSE: JMAT) | Chemicals | 1,833 | 23% | 30% |
Basics
Oil and gas exploration and production company Cairn Energy heads the list with 100% of its revenues derived from the Asia and Pacific region – mainly from India and a small proportion from Bangladesh. In absolute terms, though, its revenues are on the small side.
Electricity company International Power is unique among UK-listed utilities in having exposure to emerging markets. A little more than half its Asia & Pacific revenue comes from Australia, with the rest from Pakistan, Thailand and Indonesia -- in sum 31% of its global total.
Johnson Matthey, a chemicals company, with core businesses in environmental technologies, precious metal products, and fine chemicals, generates 23% of its total revenues from the Asia and Pacific region.
Financials
The financial sector is represented well, with no fewer than three companies making it into the table.
HSBC, which also figured in our Latin America review, generates a colossal £13.7bn revenue in the Asia and Pacific region; 27% of its global total. Standard Chartered generates less absolute revenue than HSBC, but its £6.3bn represents 67% of its global total. Furthermore, Standard Chartered's revenue from all emerging markets is twice that of HSBC.
Outside the banking sector, asset manager Schroders does significant business in Asia & Pacific, with 29% of its revenues generated in the region. Another financial company, not included in the table but worth a mention, is Prudential (LSE: PRU). This life-insurer is on the brink of massively increasing its exposure to the region with the monster acquisition of AIG's Asian business for $35.5bn.
Fags, guns and… health and safety
British American Tobacco is by now a familiar name on our globe-trotting tour of emerging markets, and it makes it into the Asia & Pacific elite with 23% of its sales in the region. Aerospace and defence company Rolls-Royce tops that with 30% exposure.
Support services group Intertek has a global network of laboratories and provides testing, inspection and certification services to a range of industries. It generates 37% of its total revenues from the Asia and Pacific region.
Some others to consider
Several major Footsie companies didn't jump the 20% sales hurdle to make it into the table, but nevertheless derive revenues in double figures from the region -- for example, Vodafone (LSE: VOD) and Tesco (LSE: TSCO).
Some companies outside the FTSE 100 with substantial Asia & Pacific revenues include hotel group Millennium & Copthorne (LSE: MLC), engineer Weir (LSE: WEIR), precision instrument maker Spectris (LSE: SXS) and spread-betting firm IG Group (LSE: IGG).
Two more, which have the additional distinction of having figured on one of our hot lists in another emerging markets region, are computer services company Dimension Data (LSE: DDT) and car dealer Inchcape (LSE: INCH).
So, there you have it: a takeaway menu of UK companies that could repay further investigation for anyone with a taste for gaining exposure to the Asia and Pacific region.
In the final article in this series, we'll look at some global oddballs and quirky local operators.
More from this series:
> The author owns shares in HSBC, International Power, Schroders, Standard Chartered, Tesco and Vodafone.
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