The United States is leaving Europe behind despite major price losses of American tech companies on the stock exchange. Of the 100 most valuable publicly traded companies in the world, 61 are from the US, one less than last year, according to an analysis by consultancy EY. No company from Europe is represented in the top ten and only one from outside the US – the oil company Saudi Aramco.
As of Dec. 27, Apple remained at the top of the rankings published Thursday with a market value of more than $2 trillion, ahead of Saudi Aramco and Microsoft. Germany and Austria are not even represented in the top 100 – the software manufacturer SAP, as the most valuable DAX value, only comes in at 106. The industrial gases group Linde, which has been based in Ireland since the merger with the American company Praxair , is on the 59th place.
American companies dominate
US companies have dominated world stock markets for years – spurred on by the growth of technology companies, which had risen rapidly in value during the stock market boom of recent years. But with the interest rate hikes by the major central banks in the weak stock market year 2022, the interest-sensitive tech giants faced a headwind. Tech companies lost 33 percent of their market value over the year, according to EY. Tesla, Apple, Meta, Microsoft, Alphabet and Amazon alone lost a total of 4.6 trillion dollars (4,323.31 billion euros).
In total, the 100 largest publicly traded companies lost $7.2 trillion, or 20 percent of their value. While consumer goods and telecommunications companies also posted sharp price losses, energy companies in particular increased (+12 percent) thanks to higher commodity prices. “The sharp rise in interest rates, the war in Ukraine and rising energy prices worldwide – all these developments have left their mark on world stock markets,” said Henrik Ahlers, CEO of EY.
According to EY, only 15 of the 100 largest exchange companies are headquartered in Europe, so the most valuable representative is French luxury conglomerate LVMH in 15th place. 19 of the largest exchange companies are from Asia, led by the tech group tencent.
Europe’s years of decline
The importance of Europe on the stock market has been declining for years. According to EY, at the end of 2007, before the height of the financial crisis, 46 of the world’s 100 most valuable companies came from Europe and at least seven from Germany. At the end of 2021 there were two more: SAP and Siemens. The Federal Republic of Germany is underrepresented on the stock exchanges, says Ahlers. But the rules for the digital economy are made by companies from the US and Asia. Germany lacked a strong start-up culture and good financing conditions for young companies. However, Germany has many medium-sized world market leaders and also world-class unlisted companies such as Lidl and Aldi or the car supplier Bosch.
In addition, Germany and Europe are disproportionately suffering from the war in Ukraine and the rise in energy prices. “In the US, industrial companies can currently produce much cheaper, the war is far away for them and nobody has to fear a gas crisis there,” said Ahlers. There is therefore little to speak of a renaissance in Europe on the world stock exchanges in the new year.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
