Global equity markets have seen a strong bounce back from the low points seen in March 2020, but volatility remains elevated, according to a new quarterly update to the Global Top 100 companies by market capitalisation rankings, released today by PwC.
The report notes that, most immediately, a disappointing reporting season for H1 2020 earnings could cause a re-evaluation of recession risks and associated stock valuations.
Having decreased by 15% ($3,905bn) from December 2019 to March 2020, the market capitalisation of the Global Top 100 as at June 2020 was only 1% ($335bn) behind December 2019.
By comparison as at 30 June 2020 the MSCI World Index (representing large and mid-cap equity performance across 23 developed markets) was 7% behind December 2019, having recovered most of the ground lost in the first quarter of 2020.
Ross Hunter, IPO Centre Leader at PwC, says,
‘With the significant volatility in financial markets, the world’s largest companies provide relative security for investors. The concentration of Technology and Consumer Services companies is a key driver of the Global Top 100 outperforming the wider market index.
‘This is a challenging environment for all companies, but there are clear distinctions in the relative performance of different regions and sectors. I hope this quarterly review will provide interesting insights into how the markets are viewing the world’s largest businesses as they adapt to this uncertain landscape.’
- Global Top 100 companies from the US and China and its regions recovered first quarter losses in March to June 2020 – Europe and the rest of the world did not recover the lost ground.
- Technology companies contributed to a 21% market capitalisation increase for US companies from March to June 2020.
- The performance in China and its regions since December 2019 benefitted from a combination of being further advanced in recovering from the effects of COVID-19 and a strong Technology and e-commerce (Consumer Services) component.
- Eighty seven of the Global Top 100 companies as at June 2020 saw an increase in market capitalisation from March to June 2020, compared with just ten from January to March 2020
- 10 companies included in the Global Top 100 as at March 2020 have dropped out and did not qualify for the June 2020 list.