If companies like to blame poor financial results on the weather, what are they going to do about the storm hovering over the Middle East and North Africa right now?
Pierre Lapointe and Alex Bellefleur at Brockhouse Cooper, ran a screen to find the companies within the S&P Global 1200 with the greatest revenue exposure to the region, where energy companies could see their operations disrupted and others could find that consumers have retrenched.
“Global equity markets have been under pressure over the past few days on concerns that revenues could be indirectly affected by the unrest in Middle East and North Africa region,” they said in a note. “Higher oil prices will mean that consumers will spend more on energy and less on other products. Moreover, rising energy prices could ultimately pass through to consumer price inflation and lead to forceful monetary tightening. For most multinationals however, the impact will be indirect.”
Their screen looked for companies with more than 5 per cent of their revenue coming from the region. Japan’s Inpex Corp., an energy company, tops the list, with a revenue exposure of 34.4 per cent. Among the other top five: Smith & Nephew PLC (24.2 per cent), Technip SA (18.2 per cent), Halliburton Co. (16.7 per cent), Tenaris SA (16.7 per cent).
As well, here are some of the more familiar consumer stocks that made the list: Avon Products Inc. (15 per cent), British American Tobacco PLC (12.4 per cent) and Nokia OYJ (12.4 per cent).
