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European companies continue to lose ground in global league table
LONDON, MOSCOW, 10 JULY 2009 – The recession has altered the make up of the top 300 global companies by value with a marked move away from Europe to Asia, according to the latest bi-annual analysis of the market capitalization of the most highly valued companies around the world by professional services organization Ernst & Young.
Whereas the number of North American companies has held steady, the number of European companies in the top 300 as of 30 June 2009, compared to 31 December 2007, has fallen from 110 to 95 and the number of Asian companies has increased from 63 to 73. Within the top 100 companies the European decline is more dramatic. As of 31 December 2007 there were 46 European companies in the top 100; by 30 June 2009 that had fallen to 35.
Overall market capitalization
The total market capitalization of the top 300 global companies increased by 8% or US$1.1trillion from 31 December 2008 to 30 June 2009, highlighting both the slide in stock markets in the first quarter of the year and the steady improvement from March onwards. This is after successive declines of 22% and 33% in market capitalization in the previous two six-month periods, which wiped US$11.3trillion off the value of those companies. Among the top 100 companies the increase in market capitalization in the first half of 2009 was slightly lower at 6%.
By sector
By sector there was a wide disparity in how market capitalizations of the top 100 companies moved from 31 December 2008 to 30 June 2009. Energy share prices improved by 23%, financials by 40% and commodities rose a dramatic 81%. However consumer goods companies in the top100 showed a decline in share price in the period as did utilities companies and heavy industry.
By country
Similarly, when the top 100 companies were analyzed by country of origin there were differing results. While the companies based in many Western European countries including France, Germany, Italy, Spain and Netherlands all showed further declines in overall market capitalization in the first six months of 2009, this was offset by Chinese, UK, Russian and Brazilian organizations that showed significant gains in value. "Even now, during the recession, Russia continues to attract investors," says Alexander Ivlev, Ernst & Young Partner and CIS Accounts, Industries and Business Development Leader. "The analysis shows that the Russian market is restoring its positions and that the value of Russian companies increased by a significant margin in the past six months. The emerging markets are more volatile and, during periods of financial instability, their conditions can evolve more quickly. Both the fall of indices at the end of last year as well as their growth in the first half of 2009 happened at accelerated rates in Russia compared with the rest of the world."
Notes to editors
All market values are from Bloomberg.
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