The Global Top 100 companies performed strongly from March to December 2019, increasing their market capitalisation (cap) by 20%. However, their market cap decreased by 15% from December 2019 to March 2020, a report compiled by professional services multinational PwC shows.
These top 100 companies, nevertheless, still outperformed industry peers amid market volatility caused by Covid-19 in the first quarter of this year.
“In the nine months to December 31, the Global Top 100’s market cap grew by an impressive 20%, including the boost from Saudi Aramco joining at the top of the list. In the following three months, while their overall value fell 15%, the companies within the Global Top 100 outperformed their industry indices; an early indication that investors value the defensive qualities of larger companies and their scope to both come through the crisis and invest in the post Covid-19 world," says PwC IPO Centre leader Ross Hunter.
Saudi Aramco joined the Global Top 100 this year in first place after having undertaken the largest initial public offering in history in December 2019. It has retained the number one position since then.
Even with Covid-19 disruption, the market cap of Microsoft and Apple each exceed $1-trillion as at March 31.
Amazon was valued at $971-billion as at March 31, but has since exceeded the $1-trillion mark owing to a surge in demand for online shopping created by movement restrictions put in place as a measure to contain Covid-19.
"Only ten companies in the Global Top 100 saw an increase in market cap from December 2019 to March, including Netflix moving from being a top-ten faller from March to December 2019, with its market having shrunk by 9%, to the second biggest riser through to March, adding 16% to its market cap.
Tesla, which was a top-ten riser in both periods, rercorded a doubling in its market cap to $96-billion by March 31.
"All regions experienced an increase in the market caps of the companies included in the Global Top 100 until December 2019, after which gains were wiped out in every country, except Saudi Arabia.
European companies in the Global Top 100 experienced the most significant reduction in relative terms in the three months to March 31, with market cap having decreased by 25% ($956-billion). UK companies in the Global Top 100, with a relatively high oil & gas sector weighting, gained a moderate 2% in March to December 2019, before seeing a 28% reduction in market cap to March 31.
The US continues to dominate the Global Top 100 in terms of number of companies in the list and market cap, albeit with a $2.2-trillion (14%) reduction from December 2019 to March.
China and its regions, the second largest contributor to the Global Top 100 with 14 companies, lost one company in the year, widening the gap with the US, PwC notes.