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Petrochina most valuable firm.

Dubai Chinese oil and gas giant Petrochina is the most valuable company worldwide measured by its market capitalisation. Petrochina tops the newest ranking by consultant firm Ernst & Young, published in its latest survey about the "100 most expensive companies by market capitalisation".

By December 31, 2009, the market value of Petrochina was $353 billion (Dh1.296 trillion), according to the survey.

In second place is US oil giant ExxonMobil with a current market capitalisation of $323 billion, and a distant third is Microsoft with $270 billion.

"During the last year, the United States lost much of its significance within the global economy," says Hendrik Hollweg, member of the executive board of Ernst & Young Germany.

"Europe and the emerging countries have apparently untied their economies from the development in North America and have replaced the US as driver of growth," he adds.

Most of all, financial companies have lost their strength on the world's stock exchanges. Only 16 banks and other financial firms are still among the Top 10, after 27 at the end of 2008.

Loss of significance

"The financial sector lost dramatically on value and significance," Hollweg says.

In 2008, all finance firms in the ranking accounted for an aggregate market capitalisation of $3.6 trillion. Since then this value has fallen to $1.4 trillion.

However, the weakness will not last long, Hollweg assumes.

"As soon as writedown necessities and other operative problems of the banks are surmounted, the financial sector will regain its relevance on the global bourses," he said.

Another sector lost its financial impact in 2009: there are only three commodity companies left in the top 100 ranking. One year earlier, there were still eight of them.

"The boom in commodities and energy has very much weakened throughout the year," Hollweg says.

"At the moment, companies which are less impacted by the recession are in the focus: producers of non-cyclical goods such as cosmetics, pharmaceutucals or foodstuffs," Hollweg says.

The number of such companies in the top 100 ranking increased from 18 to 25 during the last year.

It becomes obvious that especially China is gaining significant influence on world markets.

Among the ten most expensive companies by market capitalisation, two more Chinese companies occupy prominent ranks: Industrial and Commercial Bank of China and HSBC Holding.

Euphoria

But Hollweg dampens early euphoria about China's development.

"It is true that the impact of China on the world economy is growing steadily. But in 2007 we saw the first signs of a speculation bubble.

"Many Chinese firms gained excessive value. In the meantime, more realistic assessments of the companies have taken place," he says.

Other fast climbers were Brazilian oil giant Petrobras as well as Google, each of which managed to double its market capitalisation in the course of the last year.

Well established companies such as Johnson & Johnson or Royal Dutch Shell fell out of the top 100.

The combined market value of the ten most expensive companies grew by approximately one third to $2.4 trillion in 2009 compared to 2008.

But this is still less than the combined market value at the end of 2007, which was $3.1 trillion.

The market value of all top 100 companies at the end of 2009 was $11.9 trillion.

the trend

$3.6tr

Top financial firms' market capitalisation in 2008

$11.9tr

market value of top ten companies in 2009

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Publication:XPRESS (United Arab Emirates)
Date:Jan 9, 2010
Words:582
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