The market capitalisation of Global Top 100 companies went up to USD 20 trillion

Aurel Dragan 17/07/2018 | 11:24

The total market capitalisation of the Global Top 100 companies has increased by 15 percent since last year and went up to USD 20 trillion. This compares with a 11.5 percent increase in the MSCI World Index. The US retains the leading position with 54 companies in the Top 100, accounting for 61 percent of total market capitalisation. Second-placed China saw an increase of 57 percent when compared to the top 100 companies at 31 March 2017, totalling USD 2,822 billion.

The market capitalisation of the 100 largest companies globally has increased significantly by USD 2,597 billion or 15 percent compared to 31 March 2017, according to PwC’s Global Top 100 ranking. This rise comes on top of a 12 percent increase in 2017, and the total capitalisation continues to grow, year on year, since the global financial crisis.

Forty eight percent of growth in the past year has been contributed by US companies, on the back of strong economic conditions and their pre-eminent position in the technology sector. Europe registers an increase in market capitalisation for the second year running, with its market share remaining unchanged.

For the fourth year running, the US accounts for more than half of the Top 100 (54 companies, down from 55 in 2017). It also weighs in with 61 percent of the overall market cap, down from 63 percent last year.

Amazon is the strongest performer in terms of absolute increase in market capitalisation, gaining USD 278 billion or 66 percent in value compared to 2017.  It’s followed by two Chinese companies: Tencent, up by USD 224 billion or 82 percent, and Alibaba, rising by USD 201 billion or 75 percent. The next three highest performers in absolute terms are all from the US – Microsoft, Alphabet and Apple.

Despite coming sixth in terms of absolute growth in value, Apple retains pole position in terms of market capitalisation for the seventh year in a row. However, its lead over Alphabet in second place has narrowed by 25 percent, to USD 132 billion from USD 175 billion last year. Apple has also returned more cash to shareholders than any other company, handing back another USD 31 billion to investors in dividends and share repurchases in calendar year 2017 (having distributed USD 29 billion in calendar 2016). JP Morgan Chase ranks second in term of value distribution with USD 24 billion, up from USD 18 billion the previous year.

Turning to sectors, technology remains ahead of the financial sector in market capitalisation for the third successive year, with consumer goods in third place. The global top three are still technology companies – Apple, Alphabet, Microsoft – followed by Tencent in fifth position and Facebook in eighth, down from sixth last year.

European companies were especially hard hit a decade ago by the global financial crisis, and have seen fluctuations in their market cap since then. However, the past year has seen Europe sustain its recent recovery, with the number of European companies in the Top 100 rising from 22 to 23, and an increase of USD 331 billion in their aggregate market capitalisation. Despite this improvement, Europe is still significantly below the 33 companies it had in the Top 100 in 2010. And its 17 percent market share in 2018 – while unchanged from 2017 – is down from 27 percent in 2009.

The market capitalisation of the companies from China in the Top 100 leaps by 57 percent compared to 2017, with 12 Chinese companies making the Top 100, up from 10 last year. Hong Kong contributes another two companies, up from one in 2017. In terms of absolute increase in market capitalisation, Tencent is the leading Chinese performer in 2018 for the second year running, and the second highest overall after Amazon, increasing its value by 82 percent to USD 496 billion. Alibaba is the second highest performer from China and third overall, increasing its value by 75 percent to USD 470 billion. These strong increases have pushed both companies into the Top 10 in terms of market capitalisation, with Tencent rising to fifth and Alibaba to seventh.

„If we look at the local market, market capitalisation of the Romanian companies listed on the Bucharest Stock Exchange was, after the first six months of this year, of about EUR 20 billion, while the market capitalisation of all companies listed on the Regulated Market was of EUR 36 billion. Over all, in the first six months of this year, the Romanian capital market had a positive evolution, with two listings (a technical one and an IPO) and two bonds issues. The approximate EUR 40 million that Purcari Wineries have collected from the capital market send out a positive signal to actual and potential investors and also for companies that plan to finance their projects on the capital market”, said Ileana Gutu, Senior Manager, Valuation and economics, PwC Romania.

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