In Context

Global Market Cap

Context: The idea of this post is to add more scale perspective on some of the numbers discussed in the post Online Advertising Companies. The companies analysed there have a total market cap of $1.65 trillion on July 31, 2018. (Facebook: ~$494 billion, Alphabet ~$848 billion, and Twitter is very small comparatively at ~$23 billion). Add to that, Apple’s market cap touched $1 trillion. Comparing that to some other numbers. 


The total Global GDP in 2017 was $80.7 trillion.

United States alone, accounted for almost a quarter of this GDP pool. Followed by 14 other countries. Altogether, along with US, they pretty much cover 75% of global GDP. There are only 16 countries in the world that have GDP more than $ 1 trillion.

In that light, let’s consider the highest market cap company of the moment, Apple. As I finish this post, its market cap has touched a trillion dollars!

So, if Apple’s market cap were a country’s GDP, it will be number 17 from the top.

GDP and market cap are not comparable numbers. But since these are very large numbers, it is good to get a sense of the scale of what we are talking about. Market cap is the equity value of the company. A stock number. GDP is an annual number. A flow number. A sort of comparable number there could be company revenue.

Let’s consider another number for a better perspective.

Total Global Market Cap is $82 trillion (this is domestic market cap on all exchanges in the world/ per World Federation of Exchanges – end of 2017).

Amongst large exchanges, I find that LSE is not part of the above. So, add another $4.5 trillion of Market Cap. So, global market cap is around $87 trillion.

Now consider the stock exchanges themselves. When I refer to total market cap of an exchange here, I refer to the total market cap of all the companies trading on that exchange. There are only 18 stock exchanges in the world which have total market cap of more than $1 trillion.

 

So, the interesting fact is that Apple alone has a market cap which is more than the total market cap of around 41 stock exchanges in the world. Or that of Alphabet is more than 31 stock exchanges in this world.

That is Apple or Alphabet alone, but let’s consider another number. Going down the list of Forbes 2000, if I pick up the top 1000 large public companies, this is what I get:

 

1000 large public companies in the world (or 2.8 % of listed companies) have a market cap equivalent to 55% of total global domestic market cap.  Together, these 1000 companies record $32 trillion in revenue. (Compare this to total global GDP of $ 80.7 trillion), $2.8 trillion in profits. And control assets of around $165 trillion.

For some more colour, consider this: One could own all of Apple or all of these other 10 quite big companies, and perhaps a few more.  Alphabet is not much far behind. Perhaps, just remove Fedex from the following set of companies.

 

 

What about the companies that are not public?

Another note on the world’s largest companies. Since data on unlisted companies is hard to come by, I have picked up listed companies. However, I would like to note that there are still certain very large unlisted companies in the world. One of them is Saudi Arabia’s Aramco.

Aramco is Saudi Arabia’s flagship oil & gas company pumping out oil and selling it internationally to countries like US, China and India. Aramco is huge, one of the biggest players in Oil and Gas. It has oil reserves twenty times that of Exxon. For context, Exxon has a market cap of $355 billion. Aramco delivers around 10% of world’s oil production, and 3% of natural gas. It churned out $33.8 billion in Net Income in first six months of 2017. This income is comparable to some of the companies with the highest profits in this world. An IPO has been on the horizon for a long time. Still on horizon

There’ll be many other large government owned companies not listed. And some really large groups which are still private (such as Ikea, Cargill, Koch Industries, Wanda Group). Searching for some of these can lead to many interesting diversions. Lots to explore.

 

Further questions:
  • To consider the top companies in say, 1980 or 1990, 2000. How big were they? And what portion of global numbers did they own? The world was not as interconnected then.

Closing Note: The objective of the note is to get a perspective on a few large companies. I have referred several web-links and data points for this note. The data referred is quite spread out, and I have tried to consider and compare several sources to arrive at the above. Still, the numbers may not be exact, but they are close enough or approximated to get the broad picture. Happy to be corrected if you spot any glaring errors of fact or thinking. And keen to hear more on the open questions.

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