Stock markets, in both advanced and emerging economies, suffered during the second half of 2011 as the sovereign debt crisis in Europe and concerns about a slowdown in China unnerved investors. The MSCI World Index for large cap companies (MSCI WILC) fell 12.4 percent for the period from March 2011 to year-end 2011, while the market value of the top 500 companies fell 12.5 percent to $22.9 trillion.
Markets recovered strongly in early 2012 with the MSCI WILC rising 11.0 percent by the end of March as concerns about sovereign debt in Europe were alleviated and a run of stronger-than-expected economic data was released in the US. However, this recovery faltered toward the end of March as Spanish sovereign bond yields rose and weaker-than-expected data was released on the US jobs market.
The top company in the list at the end of March 2012 was Apple, with a market capitalization of $559.0 billion up by 74 percent from a year earlier. Apple share price reached $599.47 at the end of March 2012, up by 48.0 percent from year-end 2011. Apple overtook two oil companies, ExxonMobil and PetroChina, to reach the top spot, despite oil prices being slightly higher in March 2012 than March 2011 ($124/barrel versus $117/barrel).
The strong performance of Apple has been driven by a remarkable increase in sales volumes over the last year. In particular its latest results indicate that it sold 15.4 million iPads in the last quarter of 2011, a 111 percent increase on the last quarter of 2010, and 37 million iPhones, a 128 percent increase on the last quarter of 2010. Its latest results also revealed a record quarterly profit of $13.1 billion and cash deposits of $98 billion. Apple has recently announced a quarterly stock dividend of $2.65 per share, the first ever, the QNB press release said.
The top five companies are all technology or oil and gas companies. Their combined market value was $1.8 trillion as of end of March, or about 7.0 percent of the Top 500 companies worldwide.
The biggest share was taken by US companies, which represent 41 percent of the top 500 or $10.4 trillion, compared with $9.6 trillion in March 2011. US companies accounted for 173 of the top 500 companies in March 2012, up from 159 in March 2011. US companies outperformed other regions during this period as investor concerns were focused on problems in Europe and emerging markets, particularly the slowdown of economic growth in China. The number of Chinese companies in the top 500 fell from 27 in March 2011 to 22 in March 2012.
In terms of sectors, banking accounted for 15.1 percent of the top 500 or $3.8 trillion. However it declined from a year earlier when this sector's share was 16.9 percent and its value was $4.4 trillion, as investors' appetite for bank stocks was undermined over concerns about their exposure to the sovereign debt of a number of European countries.
The second most well represented sector is oil and gas, which accounted for $3.3 trillion in March 2012, compared to $3.8 trillion a year earlier. It has also suffered from the poor economic outlook, despite persistent strong oil prices.
Six GCC companies are included in the Top 500 companies in March 2012, with combined market capitalization of $210 billion, up by 5.6 percent from March 2011. These companies represented 0.8 percent of the total market value of the Top 500 companies in March 2012, Saudi Arabia Basic Industries Company (SABIC), ranked 63rd with a market value of $88 billion, followed by Al-Rajhi Bank with a raking of 245 ($33 billion), QNB Group at 325 ($26 billion), Saudi Telecom Co. (STC) at 404 ($22 billion), Industries Qatar at 417 ($21 billion) and Emirates Telecom at 459 ($19.2 billion).
The Top 500 has been historically dominated by US companies, but in the past few years an increasing number of companies from Emerging Asia and Latin America were included. Companies from the GCC were first included in the 2006 ranking.
Five of the six GCC companies included in the March 2012 ranking have advanced their raking, from a year earlier with QNB Group moving up the scale significantly from the 500 slot in March 2011 to 325 in March 2012.
