Why You Need to Have Money in the Emerging Markets
Global networking giant Cisco Systems, Inc. (NASDAQ/CSCO) beat on revenues and earnings estimates in its 2013 fiscal first-quarter on Tuesday. What was interesting, but not a surprise, was the company’s good performance from its Asia-Pacific and EMEA (Europe, the Middle East, and Africa) regions; albeit, it was mostly because of the Middle East and Africa regions, as the Europe division continues to be a drag on the stock’s growth due to economic contraction in the eurozone.
The Asia-Pacific and EMEA regions now account for 41% of the company’s total revenues. (Source: “Cisco Reports First Quarter Earnings,” The Network, November 13, 2012.) The results demonstrate the growing importance of the non-U.S. markets, particularly Asia, and the emerging markets to Cisco among other multinational companies.
Take a look at the recent results from global credit card provider MasterCard Incorporated (NYSE/MA). Consumer spending is on the rise; at least via credit cards. MasterCard is a good global barometer on consumer spending, as the company has a presence in over 210 countries. In a third-quarter press release, MasterCard reported that its worldwide purchase volume surged 12% in the third quarter on a local currency basis (“MasterCard Incorporated Reports Third-Quarter 2012 Financial Results,” Yahoo! Finance via BusinessWire, October 31, 2012, last accessed November 14, 2012.) MasterCard President and CEO, Ajay Banga, said, “Additionally, emerging geographies and governments continue to provide great opportunities for growth.”