The Market capitalization of the top 100 companies globally measured as of March 31 of each year experienced a decline of 11% in 2023, equivalent to almost US$3.8 trillion, representing the first annual decline since 2016 and the largest decline since the 2009 global financial crisis (-39%), according to the latest analysis of PwC, emerged from the Global Top 100 Companies report. For the first time in ten years, all the top five experienced a drop in capitalization.
In comparable terms, the market capitalization of the key sectors fell, led by consumer discretionary (-23%), communication services (-18%), financials (-11%) and energy (-10%). The financial and consumer discretionary sectors accounted for 56% of the total decline in market capitalization.
Besides, Despite the rebound in the tech sector, in the first quarter of 2023, it fell 8% in total, marking their first decline in ten years. However, it increased its share as a percentage of the world Top 100 (from 27% in 2022 to 28% in 2023), maintaining its first position in the ranking.
According to the study, which the company defines as “a window into the most important trends driving the world economy and the most significant dynamics at play in global markets”, the markets were affected by a challenging macroeconomic environment, characterized by the continued tightening of fiscal policies, high inflation and uncertainty surrounding the banking sectors in Europe and the United States.
“Over the past year, challenging conditions have clearly impacted the world’s largest companies. However, rebounds in most sectors in the first quarter of 2023 and business growth in Europe raise cautious optimism.” think Martín Barbafina partner of PwC Argentina leader of the Capital Markets practice.
ANDThey estimate that the United States registers a loss of value of US$2.9 trillion, although it maintains its position as the country with the highest participation in the list, followed by Saudi Arabia and China. On the other hand, they point out that “Europe emerges as the only region that outperformed the others, with growth of 9.5%, increasing its share in the Global Top 100 from 10% in 2022 to 13% in 2023 and thus ensuring the second place on the list”, as defined Eduardo Loiacono, partner at PwC Argentina in the Capital Markets practice.
Europe performs better
Despite of decrease of 12%, equivalent to u$s3 trillion, US companies maintained their dominant share of the Global Top 100, accounting for 70% of the list, with a total market capitalization of $21.7 trillion. Europe was the only region to experience growth, up 9.5%, while China and its regions experienced a 7.3% decline and the rest of the world fell 26.3%.
Only a few companies in the Global Top 100 managed to increase their capitalization throughout the year. Europeans posted an increase due to a combination of new entrants and like-for-like market capitalization growth. France broke into the Top 5 (ranked number four), replacing Switzerland and overtaking the United Kingdom, which now sits in fifth position. The United States, Saudi Arabia and China, despite double-digit declines, maintained their positions in the top three and were the only regions with combined market capitalizations above $1 trillion.
entrances and exits
Finally, the report mentions that, this year, there has been no direct entry into the world Top 100 as a result of an IPO and 91 companies maintained their position, which implies a context of greater stability. Also the top five companies remain unchanged, but for the first time in the last decade all of them experienced a drop in their capitalization.
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