(BFM Bourse) – Despite current macroeconomic pressures, the market capitalization of the world’s top 100 companies is reaching new heights on the stock market, reaching a record figure of 35 trillion dollars. France, now in 5th place, has moved up two places with the inclusion of Hermès in the ranking, alongside LVMH and L’Oréal, according to a PwC study.
America First. The top 100 of the largest capitalizations in the world established at the close of March 31 illustrates the supremacy of Wall Street over the other world stock exchanges. The United States continues to strengthen its dominance with 63 companies trusting the latest ranking of the consulting and auditing firm PwC Global “Top 100 Companies by market capitalization”. Overall, the total market capitalization of the world’s 100 largest companies continues to break records despite the volatility of the global economy. These 100 most valuable groups in the world are now collectively worth 35.2 trillion dollars, compared to 31.8 trillion in March 2021, an increase of 11% over one year.
100 companies are worth 35.2 trillion dollars
Not surprisingly, the United States continues to strengthen its hegemony in the ranking, with a total of 63 American companies in this top 100. Up 19% year-on-year, the market capitalization of the entire Star-Spangled Banner contingent weighs for 70% of this ranking. The podium of the world’s largest capitalizations is indeed exclusively made up of Californian technology giants. Well established on the throne, Apple and its 2.850 billion dollars of capitalization (+39% over one year), dominates the ranking followed by Microsoft which emerges for its part at more than 2.300 billion (+30%), while Alphabet (Google) is approaching 2,000 billion (+32%). The oil giant Saudi Aramco is in 3rd place with a capitalization close to 2,300 billion dollars. A new surge in oil prices and the Saudi could be able to snatch second place from Microsoft. Companies based in the United States thus account for the majority of market capitalization, while those in other regions still follow varied trends, explains PwC.
The underperformance of Chinese stocks
China, the world’s second largest economy, has only 13 of its representatives in this list. Times were still tough for many Chinese tech giants, mostly listed in Hong Kong and battered by Beijing’s drive to further regulate the sector. Chinese digital heavyweights such as Alibaba (-49% over one year), Tencent (-39%) or even the insurer Ping An (-38%) suffered heavy losses between March 2021 and 2022. American Paypal posted a less flattering performance over the period (-53%). PwC notes that this downward trend is consistent with that of previous years, when the evolution of market capitalization was broadly aligned with that of the United States. “This could signal an upcoming divergence in the capital markets growth curve as Chinese markets gain liquidity and maturity,” the study said.
For its part, the European continent is represented by 15 companies in the Top 100 whose growth in their capitalization has also experienced a moderate pace over the past ten years. Behind this average, the four UK-based companies in the ranking have done well. The market capitalization of these four fantastic British companies has increased by $240 billion since 2021 on a like-for-like basis. The oil giant Shell came out of its shell with a capitalization which soared by 161% between March 2021 and March 2022 thanks to the surge in oil prices. On the side of our tricolor flagships, the entry of Hermès in this ranking has reinforced the French presence in the world stock market elite. The famous saddler is in 89th place, thus joining LVMH (19th) and L’Oréal (46th) in the Top 100, a promotion that allows France to gain 2 places in the ranking (5th place) with a market capitalization of $730 billion.
The value of companies in other regions represented in the Top 100, such as Saudi Arabia, India, South Korea, Australia, Canada and Japan, has grown significantly since 2017, PwC notes. Companies from these regions outperformed Europe and China in 2022, totaling a combined market capitalization of $4 trillion.
The crushing weight of techno in the top 100
In terms of business sectors, technology in the broad sense (including specialists in semiconductors, electronics or payments) further increases its importance with 20 companies. It now represents 34% of the total capitalization of companies in this global ranking, i.e. a combined market capitalization of 12 trillion dollars.
The health sector is represented by 16 mainly American companies, including UnitedHealth (12th), Johnson & Johnson (13th) and Pfizer (30th). PwC also sees a steady decline in the share of financial services companies in the Global Top 100 over the past five years, from 22% in 2018 to 11% in 2022. The first company in the financial sector in this ranking points to 7th place. This is Berkshire Hathaway, the conglomerate of Omaha oracle Warren Buffett.
For Philippe Kubisa, Capital Markets Partner at PwC France and Maghreb, the Top 100 continues to highlight enduring trends in the global economy and the critical role capital markets play in supporting long-term growth. “Admittedly, the economy is currently volatile, but it is clear that over the longer term, the market capitalization of companies in the Global Top 100 continues to increase sharply, having risen from 13 trillion in 2012 to 35 trillion. dollars in March 2022″, says the specialist.
Sabrina Sadgui – ©2022 BFM Bourse