The Strategist

World's largest companies are restoring market capitalization: PWC

08/05/2020 - 05:16

PwC, an audit and consulting firm, has estimated that 87 out of the top 100 companies in the world have seen an increase in market capitalization from March to June 2020. As a result, the combined market capitalization of the world's top 100 companies in June 2020 was only 1% behind December 2019, despite continued high volatility in equity markets.

A PwC study of the world's 100 largest companies by market capitalization notes that as of the end of June, these companies had a combined capitalization of $ 25 trillion. This is 17% more than in March, when many countries around the world began to introduce the most stringent restrictive and quarantine measures to combat the COVID-19 pandemic. From March to June 2020, 87 out of 100 companies showed growth in market capitalization, while only 10 companies showed growth from January to March 2020.

The recovery in the capitalization of the world's largest companies resulted in the fact that in June 2020 the market capitalization of the top 100 companies in the world was only 1% ($ 335 billion) behind the December 2019 indicator. At the same time, PwC recalls that from December 2019 to March 2020, the total capitalization of the 100 largest companies in the world decreased by 15% ($ 3.9 trillion).

As for the current situation, PwC economists note that as of June 30, 2020, the MSCI World Index, which reflects the dynamics of shares of large and mid-cap companies from 23 advanced economies, was 7% behind the December 2019 indicator and at the same time recovered most of the positions lost in the first quarter of 2020.

The five largest companies in the world by market capitalization remained the same:
  • Saudi Aramco ($ 1.733 trillion, as of the end of June)
  • Apple ($1.581 trillion),
  • Microsoft ($1.543 trillion),
  • Amazon ($1.376 trillion),
  • Alphabet ($966 billion).
All these companies' market capitalization has grown since March - Saudi Aramco by $ 131 billion, Apple by $ 469 billion, Microsoft by $ 344 billion, Amazon by $ 405 billion, Alphabet by $ 167 billion.

Regarding the situation in different regions, PwC reports that the top 100 companies from the United States and China have regained positions lost in the first quarter between March and June 2020, while companies from Europe and other countries of the world were unable to recover.

At the same time, the share of technology companies in the total increase in the market capitalization of American companies for the period from March to June 2020 was 21%. With regard to the situation in China, PwC notes that the results achieved by the country's largest companies since December 2019 were driven by the rapid recovery of business from the effects of COVID-19 and the presence of a well-developed high-tech and e-commerce segment.