Global Top 100 Companies gain 20% value prior to Covid-19 downturn – PwC
JOHANNESBURG - The Global Top 100 companies by market capitalisation increased by 20 percent from March to December and still outperformed industry peers amid market volatility caused by Covid-19 in the first quarter of 2020, according to new analysis by PwC released on Thursday .
PwC’s said for the year to March, 31, 2020, market capitalisation of these firms fell by 15 percent from December 2019 to March 2020.
"This dual analysis seeks to provide a clearer picture of how the world’s biggest companies were performing before the Covid-19 crisis created an unprecedented impact on global markets and signs of how they responded in the early days of the crisis," PwC said.
The report said while the market capitalisation of the Global Top 100 companies declined by $3.9 trillion, or 15 percent, to $21.4 trillion from 31 December 2019 to 31 March 2020, the represented companies performed relatively well compared to their industry peers.
"It’s an early indication that, even as they pick their winners and losers between and within sectors, investors value a combination of the resilience and defensive qualities of the larger companies, along with their scope to invest in the aftermath," the report said.
Even with Covid-19 disruption, the market capitalisation of Microsoft and Apple each exceed $1 trillion as of March.
While e-commerce firmAmazon was valued at $971bn as of March, PwC said it had had since exceeded the $1tn mark due to a surge in demand for online shopping created by movement restrictions put in place as a measure to contain Covid-19.
Oil firm Saudi Aramco joined the Global Top 100 this year in first place having undertaken the largest Initial public offering (IPO) in history in December, and had retained this position since then.
Meanwhile, media-services provider Netflix moved from being a top ten faller from March to December 2019 (market capitalisation -9 percent) to the second biggest riser through to March 2020 (+16% percent)
Car maker Tesla which entered the Global Top 100 and was a top ten riser in both periods, with its market capitalisation doubling to $96bn
However, European companies in the Global Top 100 experienced the most significant reduction in relative terms in the three months to March 2020, with market capitalisation
decreasing by 25 percent of $956bn.
The US continued to dominate the Global Top 100 in terms of number of companies in the list and market capitalisation, but with a $2,204bn, or 14 percent reduction from December 2019-March 2020.
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.
The report also found that the value of the Top 100 Unicorns grew by 5 percent to $853bn as at March 2020.
"Prior to Covid-19, a healthy pipeline of unicorn IPO candidates was building, including Airbnb and Didi Chuxing. However, the combination of the Covid-19 fallout, along with other trends affecting unicorns, is quite likely to result in delays in unicorn IPOs in the near term," the report side.
"It is clear that public market investors are becoming more challenging of high venture capital valuations and have sharpened their focus on the pathway to profitability and cash generation. Recent high profile unicorns – both those that did make it all the way to IPO and those that
didn’t - have contributed to a heightened sense of scepticism among some investors," it said.