DOHA
THE Financial Times (FT) recently released its list of the top 500 global companies by market capitalisation as at end- September 2012. The total market capitalisation of the top 500 companies increased 17 percent from September 2011 to September 2012 to $25 trillion, equivalent to about 35 percent of global GDP.
The strong performance of the leading global stocks has been supported by rising global market capitalisation during this period, according to QNB Group. The MSCI All Country World Index for Large Capitalised Companies rose 18 percent in the year to end-September as concerns about sovereign debt in advanced economies, particularly the Eurozone, have eased and central banks have maintained highly accommodative policies by extending quantitative easing or expanding lending and stability funds. This led to higher market capitalisation at the end of September, but there are significant downside risks with the global economic outlook deteriorating and further sovereign debt tensions could emerge.
There are six GCC companies in the top 500 global list and their capitalisation rose 3 percent from September 2011 to September 2012 to $191 billion.
GCC’s leading companies have underperformed the rest of the world over this period as they have been less affected by the alleviation of sovereign debt concern in advanced economies and as their exposure to eurozone debt, in particular, is lower than the other large corporations.
Broadly speaking, the GCC companies have seen steady growth in market capitalisation with little impact from sovereign debt crises.
Meanwhile, many other global companies have recovered sharply after their market capitalisation was driven lower by the sovereign debt crisis.
In terms of sectors, technology hardware and software companies have performed particularly strongly, accounting for $2.6 trillion of market capitalisation in September 2012, up by 27 percent from a year earlier.
Banks and financial services companies have also performed well as they have been direct beneficiaries of the easing of tensions related to sovereign debt. There were 90 financial companies in the top 500 accounting for $4.3 trillion of market capitalisation in September 2012, up by 18 percent from a year earlier, broadly in line with growth in the overall top 500. Oil and gas producers accounted for $3.1 trillion of the total index in September 2012, up by 11 percent from a year earlier.
Oil prices have averaged $111 per barrel over this period, a relatively high level compared with historical averages. This has supported the market capitalisation of energy producers.
The company with the largest market capitalisation in the MENA region is Saudi Basic Industries (SABIC), which is predominantly a petrochemicals company but also produces fertilisers and steel. Its market capitalisation reached $73 billion at the end of September 2012 and it ranked 81st in the top 500 global companies. Although production has increased, weaker prices for its products and slow global growth have led to lower profits for the company in each of the last four quarters.
SABIC reported profits of $1.7 billion in the third quarter of 2012, 23 Sweden looking at MENA markets for growth lower than profits in the same period of 2011.
Two Qatari companies make the FT top 500 list. Market capitalisation at QNB and Industries Qatar (IQ) rose 5 percent and 15 percent, respectively, in the year to September 2012.
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