To: 03/07/2022 16:57
According to a study, for the first time there are no German companies among the 100 companies with the highest stock market value. American companies dominate the ranking. But the big winner is a Saudi multinational oil company.
German companies are losing more and more weight on the world stock exchanges. While there were still seven German companies among the 100 most valuable at the end of 2007, there were still two companies at the end of 2021. In the first half of 2022, no German companies are represented in this ranking. This is the result of a study by the audit and consulting firm EY.
The highest rated company based in Germany is software provider SAP with a market value of $106 billion, which is only enough for the 113th rank. place with $98 billion, while industrial gases group Linde, which has been headquartered in Ireland since the merger with Praxair, ranked 74th.
American companies still in the lead
According to calculations, the oil company Saudi Aramco is the most expensive company in the world with a market value of 2.3 trillion US dollars – ahead of Apple. Overall, however, little has changed in the dominance of US companies on global stock exchanges: the number of US companies that could be ranked among the 100 most valuable companies in the world at mid-year is 60. It six months ago it was 61.
As of June 30, 2022, the top 10 included Microsoft, Google’s parent company Alphabet, Amazon, Tesla, investment firm Berkshire Hathaway, health insurer Unitedhealth, pharmaceutical and consumer goods group Johnson & Johnson and the Facebook Meta.
The most valued European company at the end of the first half was the Swiss food group Nestlé in 20th place. Before the financial crisis of late 2007, according to EY auditors, 46 of the world’s 100 most valuable companies were from Europe. There are only 16 left.
Return of the energy sector
Falling prices on global stock markets – triggered by Russia’s war on Ukraine, recession fears and rising interest rates – destroyed billions of dollars of value in the first half of 2022. Market capitalization alone – i.e. the value of publicly traded shares – of the 100 most expensive companies fell 17% or $6.1 trillion to about $29.8 trillion in the first six months.
The market value of long favored technology groups has collapsed by 28% compared to the end of 2021 (reference date: December 31, 2021). Contrary to the trend, oil and gas companies among the top 100 increased their stock market value by 19%. “Recently, investors have focused more on profitability than growth,” explained Henrik Ahlers, CEO of EY Germany. “Money is no longer so easy, demands on target companies and their financial ratios are increasing.”
Gloomy prospects for Europe
Although many of the biggest companies are still posting strong profits, the current situation has led to deep uncertainty, says Ahlers. He expects a very difficult second half: “The bad news is piling up, many crises, some of which feed into each other, must be managed, and the danger of a global recession is now real.”
Ahlers believes that the digitalization boom triggered by the corona pandemic will have a decisive impact on the economy and the stock exchanges in the years to come. Here, Europe and Germany are in a weak position. Of the 23 technology companies currently in the top 100, 17 are headquartered in North America, four in Asia and only two in Europe. According to him, the trend towards digitalization has reduced Europe’s weight on global stock exchanges in recent years.