US firms cement position in global top 500 league

Shares of most emerging markets, except China, have declined

Despite the growing prominence of emerging markets such as India on the global stage, the big-boy club of global markets continues to be dominated by US-based corporations. According to data, 203 of the current 500 biggest firms in the world — in terms of market capitalisation — hail from the US. A decade ago, there were only 164 US companies on the list.

Despite the growing prominence of emerging markets (EMs) such as India on the world stage, the bigboy club of global markets continues to be dominated by US-based corporations.

According to data, 203 of the current 500 biggest companies in the world — in terms of market capitalisation — are from the US. A decade ago, there were only 164 US companies on the list. On the other hand, the tally of EMs, including India and South Korea, has fallen. For instance, the number of Indian firms in the top 500 has fallen from 13 to 11 between 2008 and 2018, even as India dethroned three other markets to emerge as the eight-largest in terms of market value.

Similarly, South Korean companies in the list have fallen from six to three. China has been an outlier with the number of companies in the top 500 jumping from 25 in 2008 to 40 now, data shows.

This consolidation in the position of USbased companies in the list is mainly on account of three factors — superior market returns, rise of technology firms and fall in the stature of European markets.

Emergence of the new-age Silicon Valley companies is the major reason behind the increasing share of US-based companies. The total number of technology companies in the list has risen from 25 in 2008 to 55 now. This rise came at the cost of energy, basic materials and communication sectors, all of which have witnessed sluggish growth. US Germany France

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UK Japan China

The best example for this is the so-called ‘Faang’ stocks, which comprises the five giants Facebook, Amazon, Apple, Netflix and Google. These are the top listed startups globally that weren't in the race a decade ago. Today, the market cap of these companies is bigger than the gross domestic product of several nations. These entrants have overtaken traditional stalwarts such as Exonn and General Motors.

Another reason behind US’ dominance is that it has emerged as the preferred destination for listings of big start-ups, particularly India South Korea South Africa

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Brazil 210 140 70 from the technology sector.

Also, US markets have seen a big bull run following the 2008 crisis. The S&P500 index has rallied 93 per cent since 2008, outperforming most of the developed and EMs including India. The benchmark Nifty has also gained 88 per cent during the decade.

On the other hand, most European equity markets have underperformed compared to global markets since the 2008 crisis. Broader economic slowdown, along with lack of demand, has hurt prospects of European companies in the top 500 list.