Global Top 100 sees 11% decline in market capital to US$3.8tn

The global Top 100 companies have seen their market capitalisation decline 11% in 2023, equivalent to almost US$3.8tn (£2.41tn), according to new analysis from PwC’s Global Top 100 Companies report.

The new analysis stated that this is the first yearly decline since 2016 and the greatest drop since the global financial crisis of 2009 (-39%).

According to the report, a challenging macroeconomic environment caused by ongoing tightening of fiscal policy, high inflation, and uncertainty surrounding the United States and European banking sector have weighed on equity markets globally.

The US, the largest contributor to the Global Top 100, was the main driver of this decrease, dropping US$2.9tn (£2.3tn) in value, however retained its number one spot as a share of the list, ahead of Saudi Arabia and China.

Europe outperformed all other regions, increasing its share of the Global Top 100 from 10% in 2022 to 13% in 2023, moving up to second spot on the regional list.

At a jurisdiction level, France entered the top five at number four in 2023 (US$980bn) (£788.4bn).

Despite double digit declines, the report suggested that the US (-12%), Saudi Arabia (-18%) and Mainland China (-11%) retained their position in the top three and were the only jurisdictions with combined market capitalisations of over US$1tn (£80.4bn).

However, even though the top five companies remain unchanged, for the first time in 10 years all of them saw a fall in market capital, which accounted for 50% of the overall market cap drop this year.

At the industry level on a like-for-like basis, all key sectors declined in market capitalisation, led by consumer discretionary (-23%), communication services (-18%), financials (-11%), and energy (-10%).

Despite a rally for technology in Q1 of 2023, the technology sector fell 8% overall – its first decline since 2016. However, it maintained its top position in the Global Top 100 by growing its share from 27% in 2022 to 28% in 2023.

Stuart Newman, Global IPO Centre leader, partner, PwC UK, said: “PwC’s Global Top 100 report remains an important window into the biggest trends driving the world’s economy and the most significant dynamics at play in global equity markets.

“Challenging market conditions over the last year have clearly impacted the world’s biggest companies. However, rebounds for most sectors in the first quarter of 2023 and the growth of companies in Europe are cause for cautious optimism.”