Canada: North American companies resurgent in market value rankings

Public companies in North America made up additional than one-third of the world’s 2,500 major groups by market price last year for the initial time since before the financial crisis.
Their resurgence comes at the expense of companies in developing markets. In 2013, these accounted for just over one in four of the major groups, but in the course of 12 months this slipped 3 % points to 22.7 %.

Analysis by Strategy &, the consultancy formerly known as Booz and Company, shows that the proportion of US and Canadian groups in the top 2,500 ranking is the highest since 2006, at the same time as they made up almost 40 %.
But the numbers of companies in the 2,500 major from Japan and from western Europe are still below 2006 levels, at 8.6 % and 21.6 % respectively.

Per-Ola Karlsson, a partner at Strategy &, said there were some currency effects in the numbers — the market valuations are calculated in the dollar which was particularly strong last time— but the two underlying drivers were the performance of companies in individual economies and the uptick in M&A activity.

“The results reflect how the US economy has rebounded additional strongly than other economies,” he said.
Figures from Dealogic show that deals worth $3.6tn were announced last year. This is the third highest level on record, behind only 2006 and 2007.

Within this total, the US accounted for 45 % of world M&A, its major proportion since 1999.
Mr Karlsson said that the renewed importance of M&A could help to explain why North American groups featured additional strongly part the 2500 biggest listed groups.

The in general slippage in the corporate showing of developing economies disguised some differences at country level.
Mr Karlsson said that the majority striking feature was that China’s representation had fallen from 8.3 % in 2013 to 7.9 % last year.
“This may just be a reflection of dollar strength,” he said. “But even if you take out the currency result it is still surprising, because China has not faced crises of the kind seen in some other nations.”

He as well noted the impact of last year’s falling commodity prices on economies reliant on oil, gas, metals and other resources, since this affected both the valuations of some of their major companies, and the price of their currencies.
The starkest fall at country level was Brazil where the proportion of companies in the world top 2,500 slipped by one-third to just 1.6 % of the total.

Last year saw the initial setback in the advance of companies from developing economies other than the Bric nations (Brazil, Russia, India and China) for additional than a decade. In 2013, groups from emerging markets such as Mexico, Nigeria and Thailand accounted for additional than one in 10 of the world’s major 2,500 public companies for the initial time.