Swiss companies gaining further ground on world stock markets
Analysis of the market capitalization of the world's most highly valued companies Four Swiss companies among the 100 most valuable companies in the world / Most expensive Swiss companies Nestlé and Roche Holding / BRIC countries gaining rapidly in importance
ZURICH, JANUARY 7, 2010 – The market value of the top Swiss corporations grew over the course of 2009, thereby increasing Switzerland's importance on the world's stock markets. As of December 31, 2009, four Swiss companies ranked on the list of the 100 most expensive companies in the world – one year ago there were only three. In terms of numbers this puts Switzerland, together with Germany and Brazil, in sixth place in the country rankings (up from eighth place last year) – behind the United States, China, Great Britain, France and Japan. The most expensive Swiss companies are Nestlé and Roche (places 17 and 28). Novartis and Credit Suisse also appear on the top 100 list (places 32 and 98).
Measured in terms of total market capitalization, Switzerland is in fifth place (up from seventh last year). The Swiss companies listed in the top 100 currently have a total value of USD 526 billion, whereas at the end of 2008 they were only worth USD 416 billion – a gain of USD 110 billion or 26%. These are the results of an analysis by the auditing and consulting services firm Ernst & Young.
While Europe and the United States have lost ground in the past 12 months, Asian companies in particular have gained in importance on the global stock markets. The number of Chinese companies in the top 100 rose from 8 to 11 last year, and in the top 300 their number actually increased from 19 to 25.
Europe, by contrast, is now only represented by 34 companies in the top 100 – a year ago this figure was 38. North America’s share fell over the past twelve months from 43 to 39.
Renaissance of the financial sector
The financial crisis led to a significant temporary weakening of the financial sector on the world's stock markets, from which the industry has now partly recovered. As at the end of 2008 only 16 companies from the financial sector had made it onto the top 100 list, but in the meantime this figure has climbed back up to 24. The number of banks in the top 100 rose from 12 to 21.
“Recently, some banks have managed to post surprisingly good results. Most market observers now believe that the financial sector has weathered the worst of the storm and that some institutions are actually emerging from the crisis stronger than they were before," says Stephan Haagmans, Head of Transaction Advisory Services for Financial Services at Ernst & Young Switzerland. A year ago, the financial sector companies listed in the top 100 were worth a total of USD 1.42 trillion; today they are valued at USD 2.73 trillion, which equals growth of 92%.
The energy and commodities industries have also regained a significant amount of ground. The number of energy companies occupying a place in the top 100 climbed from 16 to 18 in 2009 and the number of commodity firms from 3 to 6. “The resurgence of the world economy is causing energy prices to rise. This is making oil and gas companies in particular significantly more attractive,” explains Louis Siegrist, Head of Transaction Advisory Services at
Ernst & Young Switzerland.
Stephan Haagmans points to a marked change in investor behavior over recent months: “Investors are once again looking to the future and are on the lookout for new opportunities and growth markets. The shock and the depression experienced by both investors and companies as a result of the crisis have subsided. Investors are taking a relatively relaxed approach again, even to negative news such as the Dubai crisis.”
BRIC countries gaining ground
The so-called BRIC (Brazil, Russia, India, and China) countries in particular are playing an increasingly important role on the world stock markets. At the end of 2009 18 firms from these countries ranked in the top 100, up from 11 last year. "Investors clearly agree that the next ten years will be the decade of the emerging markets. Whereas the industrial nations will continue to suffer from the aftermath of the financial crisis for a long time yet, the emerging markets are rapidly gaining in importance,” comments Louis Siegrist.
“The world economy is developing into a multipolar system with several important growth regions. The current crisis has reinforced this development,” says Louis Siegrist. “China in particular is obviously one of the top players of the future. The importance of China and Chinese companies for the world economy will continue to grow. This is already being reflected in stock market prices.” Driven by state economic stimulus programs, the Chinese economy has returned to strong growth; the People’s Republic seems to be overcoming the crisis relatively well. For 2010, it is even predicted that China will return to double-digit growth.
As recently as the turn of the year, the slump in commodity prices and the global recession was putting considerable pressure on the share prices of companies from the BRIC countries. “The crisis had temporarily eroded confidence in the emerging markets. But meanwhile it is becoming apparent that they are weathering the crisis better than their western counterparts. At the moment, investors are clearly pinning their hopes on China, India, and Brazil," Louis Siegrist notes.
Petrochina the most expensive company in the world
The company with the highest valuation in the world as of December 31, 2009, was Petrochina, with a market capitalization of USD 353 billion, followed by Exxon Mobil (USD 324 billion). At the moment the ten most expensive companies in the world are worth a total of USD 2.4 trillion – one year ago their stock market value came to USD 1.8 trillion. The value of the 100 most expensive companies in the world rose over the course of the first half of the year from USD 9.3 to USD 11.9 trillion.
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