Why investors should care about Asia now...

The US economy was still recovering during the first quarter. The unemployment rate remained elevated. Housing data remained mixed. And credit remained fairly light. Yet large US companies appear to have performed particularly well during the first three months of the year, so who should they and their shareholders be thanking?

While Europe teeters amid a debt crisis and the domestic recovery starts and stops, major US multinationals are recording sales and earnings growth largely on the buying power of the rest of the world. Heavy industrial names like Caterpillar, technology leaders such as Intel and global consumer product and industrial leader like 3M have all made investors happy with better-than-expected first-quarter earnings results, with most of their profit growth coming from overseas, especially the Pacific.

US companies bolstering their revenues with sales abroad is not new, but the role these markets are playing has expanded recently as more established economics have buckled.

Asian demand is a huge factor in global growth, but not every nation within the region is poised for the same continued expansion. In fact, because China is the main source of that demand, certain sectors could see a bit of a slowdown in their earnings growth within the region.

Companies such as 3M, which on Tuesday posted earnings of $1.29 a share, up from 74 cents a share a year earlier, are turning their focus to emerging markets in ways that would have seemed inconceivable a decade ago.

By 'localizing' its products to optimally meet the needs of each regional emerging market, 3M essentially is able to offer customized products which can readily outperform local competitors' products.

Some of the emerging market surge is less about the economies themselves than about the cost of the raw materials and energy needed to power them.

Although a little caution is warranted particularly in the industrial and technology sectors.
It's important to note that the earnings of the US companies are increasingly coming from overseas.

These shares are for good and experienced investors only, I think, because you need to inform yourself very good about the evolution of the company and the share. You also need to look very good at the future of the company.
Once you have enough information you can decide with good taught if you will invest in these shares or not. If you do good research you can make a lot of money on these shares.


This blog is based on following article: http://www.smartmoney.com/investing/economy/why-investors-should-care-about-asia-now/?cid=1108#mod=BOL_hpp_footer

Liesbeth Masschelein