Ten years on from the global financial crisis and amid much talk of cutting costs and squeezeing supply chains, it appears that the world's biggest corporations are actually doing alright. Figures released yesterday by PwC show that the market capitalisation of the 100 largest companies globally has increased significantly by $2,597 billion or 15 per cent compared to 31 March 2017, following a 12 per cent increase the previous year. The Global Top 100 ranking shows that the trend of increased year-on-year capitalisation has continued since the 2008 credit crunch.
Almost half this growth was created by US companies, which account for more than half of the Top 100 (54 companies, down from 55 in 2017). US companies also have 61 per cent of the overall market capitalisation, down from 63 per cent last year. The companies with largest growth were Amazon, Tencent, Alibaba, Microsoft, Alphabet and Apple (note two Chinese, four US). And Apple is the biggest company in terms of market capitalisation for the seventh year in a row.
There are 23 European companies in the top 10 – up from 22 last year. But that's still significantly below the 33 companies it had in the Top 100 in 2010. And this year 12 Chinese companies made the Top 100, up from 10 last year.
For corporate treasurers and CFOs, the gatekeepers of corporate profits and cash flows, these figures are a point for reflection, underlining the robust financial health in some sectors and some parts of the economy, even as many other companies focus on cost-savings, squeezing working capital out of suppliers and reducing workforce through automation. The following stats from PwC's Global Top 100 provide some food for thought.
- Top 100 companies market cap increased by 15 per cent compared to 31 March 2017.
- The US is the largest contributor of the Top 100, gaining $1,259 billion to total $12,187 billion.
- China, the second largest contributor to the Top 100, saw an increase of 57 per cent when compared to the Top 100 companies at 31 March 2017, totalling $2,822 billion.
- 85 companies from 2017 survived to be in the list at 31 March 2018 – a decrease of 7 per cent compared to last year (91 companies from the 2016 Top 100 list were on the 2017 list).
- There were no direct entries via IPO this year. The last company to enter the Top 100 via IPO was Alibaba in 2014.
- The market cap of the most valuable company at 31 March 2018, Apple, increased by 13 per cent to $851 billion. The US still has the highest combined market capitalisation of national Global Top 100 companies ($12,187 billion), a 12 per cent increase since 31 March 2017.
- 2018 has not seen much change in the location split compared to 2017: the US dominates with 54 US companies in the Global Top 100 (55 in 2017, 42 in 2009). China holds the second position with 12 companies (two more than last year and three more than 2009) and the UK comes third with five companies (no change from last year, there were nine in 2009).
- The threshold to enter the Top 100 has increased to $97 billion this year, compared to $88 billion in March 2017.
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