What is the FA100?

How our FinanceAsia 100 index originated and why it changes each year



We created the FinanceAsia 100 in September 2002. Our blue chip index was created in conjunction with our cover story of the same month, 'Asia's century- the sequel?'. The central premise of the article was to revise some negative notions about Asia (which were then prevalent) and review Asia's equity story in a more positive light. The performance of Asian equities since then has largely vindicated the bullish stance of the article.

The FinanceAsia 100 index was benchmarked as of January 2, 2003 and at the time the cover story was published the index stood at 918.

Our view on Asia was that the region's blue chip companies had learned much from the 1997 crisis and had come out of it stronger, leaner and with a stronger vision and management. We wanted to measure this trend – hence the creation of the FinanceAsia 100.

We approached UBS to help us create an index which would reflect the best of Asia. We settled on a methodology of picking out the most profitable companies over a three year business cycle. That is to say, from a total universe of listed Asian companies, we filtered the 100 which had made the biggest aggregate net income over the three consecutive years. From this we derived what we felt was a representative list of Asia's 100 bluest chip companies. We weighted the index by market capitalisation.

In order to make sure the list retained its underlying philosophy – of tracking the performance of the 100 most successful companies in the region – we decided that each December we would recalibrate the list. This is the fourth year we have reconstituted the FinanceAsia 100, with the help of UBS, and this year 15 companies dropped out and 15 more profitable companies entered.

At the time of writing, the index was hovering around the 1,636 mark, up roughly 78% from when it was first launched in September 2002. We feel that we have created an index which provides a useful barometer for those who watch the region and its growing importance in the global economy.

In this annual guide, which is in its third edition, we go inside the FA100 and the companies that constitutes it. We analyse the index by country and by sector, benchmark the top companies against their global peers, cut and dice the rankings by different metrics, and gain forecasts from industry experts on how the FA100 will perform in 2007.

The FA100 is an elite club of the region's best blue chip companies and we hope you find this guide to the index and its constituents useful.