Driven by banks, the total value of the world’s largest 500 listed companies, measured by market capitalisation, increased by 13% to $26tn in 2012, a report by QNB Group said.
The increase was principally driven by banks whose market capitalisation rose 29% to $4.2tn in 2012, the report said citing Financial Times data.
Five companies from the GCC (Gulf Co-operation Council), including two Qatari firms, made it into the Global 500 for 2012. The two Qatari companies were QNB Group with a market capitalisation of $25bn and a ranking of 356th and Industries Qatar ($23bn, ranked 384th).
The other GCC companies were Sabic and Al Rajhi Bank of Saudi Arabia and the UAE-based telecommunications company Etisalat.
Bank stocks “came under pressure” during 2011 owing to concerns about their exposure to the European sovereign debt crisis and the impact of new regulations and deleveraging, QNB said.
A number of factors led to a strong recovery in bank share prices in 2012. These included the easing of tensions in the eurozone despite the fact that fundamental challenges remain, relating to the region’s sovereign debt, weak economic growth and rising unemployment.
Additionally, the outlook for the global economy became increasingly positive towards the end of the year. Notably, the US housing sector, which was a principal trigger of the 2008 financial crisis, has started to recover, improving the outlook for banks that were exposed to this sector.
As a result, it was the leading US and European banks that contributed most to growth in market capitalisation in 2012. The outlook for US banks benefited from the recovery in the American housing market and broader economy.
The collective increase in market capitalisation for the seven US banks in the Global 500 was $195bn in 2012, 17% of the value of banks in the rankings.
In Europe, HSBC, Lloyds Banking Group and Unicredit were the “strongest contributors” to bank market capitalisation growth in 2012. These banks benefited from the easing of eurozone tensions, QNB said.
The 11 Chinese banks in the Global 500 at end-2012 accounted for 23% of the sector’s market capitalisation, ahead of the US banks’ 17% share. Taken together, the 11 top Chinese banks’ market capitalisation grew by 11% to $962bn in 2012.
They were boosted towards the end of the year by strong government support, a new leadership that has emphasised domestic investment and consumption and positive economic data.
Oil and gas Producers, the second largest sector, saw market capitalisation fall by 2% in 2012, despite small increases in global oil prices and production. Brent oil prices were 0.4% higher on average in 2012 at $111.8 per barrel.
The total global oil production was 2.7mn bpd higher at 90.8mn bpd, on average, in the first three quarters of 2012 versus the same period in 2011. However, most of the increase in production was from Opec (1.8mn bpd), which is largely controlled by unlisted state-owned producers.
As a result, investors were broadly neutral on publicly listed oil producers during 2012.
If major national oil companies were listed, their market capitalisation would probably be considerably larger than ExxonMobil’s ($395bn).
ExxonMobil is the largest listed oil and gas company with a total hydrocarbon resource base of 87bn barrels of oil equivalent (boe).
The Global 500 pharmaceutical and biotechnology sector performed well in 2012 with market capitalisation rising 11% to $1.8tn.
The largest Global 500 company is Apple, with market capitalisation growth of 33% to $501bn during 2012. Samsung Electronics posted capitalisation growth of 53% to $228bn in 2012. Both these companies were boosted by strong sales of their top-end mobile handsets. This drove a 14% increase in market capitalisation of the technology & hardware equipment sector to $1.4tn.
Software and computer services grew 17% to $1.1tn market capitalisation in 2012.
US companies dominate this sector with household names such as Microsoft ($225bn market capitalisation), IBM ($216bn), Google ($187bn) and Oracle ($157bn).
The Facebook initial public offering boosted this sector’s representation in the Global 500 as it achieved a market capitalisation of $29bn at end-2012. SAP, the German software-solutions company, was the largest contributor to growth in this sector.
Gulf Times
