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The Financial Times (FT) released its quarterly list of the world’s top 500 companies at the end of December. The list uses market capitalisation based on a company’s share price to calculate the rankings. Qatar’s leading companies have made substantial progress in the rankings during 2011, according to analysis by QNB Capital.
ExxonMobil was the top company in the rankings with a total market capitalisation of US$406bn. ExxonMobil was briefly overtaken by Apple in the previous rankings in September, but has subsequently recovered the top position. Sustained high oil prices have supported ExxonMobil’s share price relative to other sectors.

Top Global Companies by Market Capitalisation, December 2011

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The total market capitalisation of the top global 500 companies declined by 8.7% during 2011, to total US$22.9trn, compared with US$25.1trn at the end of 2010. The fall in market capitalisation of the world’s leading companies was a consequence of the poor performance of global equity markets in 2011 as global share prices fell. The MSCI World index for large companies fell by 7.6% in 2011. The decline was mainly a result of the Eurozone debt crisis and concerns about fiscal retrenchment in developed markets, according to QNB Capital.

Banking was the most strongly represented sector in the company rankings. It accounted for 14.1% of overall market capitalisation and included 67 companies. The banking sector was followed by oil and gas producers with a 13.7% share that included 43 companies.

US companies dominate the top global 500 list, with a total of 177 companies accounting for 40.8% of overall market capitalisation. Japanese companies come in a distant second, with a total of 37 companies accounting for 5.3% of the total.

Six companies from the Middle East and North Africa region (MENA) made it into the rankings, accounting for 0.8% of the market capitalisation of the top 500 companies. The top two MENA companies are both Saudi Arabian. The petrochemicals company, Saudi Basic Industries Corporation (SABIC), ranked 68th with a market capitalisation of US$76.6bn and the Saudi Bank, Al Rajhi, ranked 267th with a market capitalisation of US$27.7bn. A third Saudi company, Saudi Telecom, also made it into the top 500 rankings at 452nd with a market capitalisation of US$18.0bn.

Top MENA Companies by Market Capitalisation, December 2011

 

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Of the remaining three MENA companies in the top 500 rankings, two were Qatari, QNB Group and Industries Qatar (IQ), accounting for 0.2% of the total top 500 market capitalisation. QNB Group came in at 278th place with a market capitalisation of US$26.6bn, up from US$19.9bn at the end of 2010.

During 2011, QNB Group’s market capitalisation has been boosted by a 6.8% increase in its share price and a rights issue for 25% of the group’s shares. The strong performance of QNB Group’s share price was driven by rising profitability and strong growth of total assets. Net income at the bank has risen by 32% in 2011 to US$2.1bn and total assets rose by 35% to US$82.9bn.  

QNB Group has made rapid progress up the rankings from 500th in March 2011 to 278th in December 2011. According to QNB Capital, falling global equity markets have led to a drop in the market capitalisation of most of the companies in the top 500 rankings. The increase in QNB’s share price has therefore led to a significant improvement in its rank by market capitalisation.

Industries Qatar has also moved up the rankings from 461st at the end of 2010 to 384th in December 2011. Over this period IQ’s share price increased by 15.5%. IQ’s strong performance was a consequence of strong profits, which rose to US$1.7bn in the third quarter of 2011, a 35.0% increase over the same period in 2010. IQ’s profit growth was driven by a recovery in the petrochemicals sector, which has benefited from recent sustained high oil prices.

The strong performance of QNB Group and IQ in 2011 in terms of their share price and market capitalisation has been a consequence of their ability to benefit from the strength of the Qatari economy relative to the advanced economies that dominate the FT’s top global 500 rankings, according to QNB Capital. QNB Capital estimates that real GDP growth in Qatar was 21.0% in 2011 compared with the IMF’s estimate for growth in advanced economies of 1.6%.

In Qatar, strong growth and high prices in the hydrocarbons sector have supported growth in non-hydrocarbons sectors, presenting Qatari companies with good opportunities for growth.


 


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