US firms on list rise to 171 from 159 while Chinese firms fall to 24 from 34
[NEW YORK] American companies are supplanting China from the world's 500 biggest stocks faster than at any time in the past decade, as an improving US economy and investor confidence in free markets overcomes the lure of equities offering twice the profit growth.
US corporations led by Apple and Exxon Mobil make up 171 of the top 500 with a market capitalisation of US$10.6 trillion, or 40.3 per cent of the total, compared with 159 valued at US$8.24 trillion in 2009, according to data compiled by Bloomberg. PetroChina, Industrial & Commercial Bank of China lead the 24 Chinese firms worth US$1.74 trillion, down from 34 with a capitalisation of US$2.19 trillion.
China's share of the world's biggest companies diminished even though its government-directed economy has continued to expand while the US and Europe showed anaemic growth during the past four years. While the Standard & Poor's 500 Index doubled since reaching a 12-year low in March 2009, the Shanghai Composite Index fell 6.5 per cent on concern state ownership of business means investors aren't the first priority. Valuations for Chinese companies fell to half of those in the US.
"The discount in valuation is reflective of not having very specific private-property laws in China," Wayne Lin, a money manager at Baltimore- based Legg Mason, said on Nov 27. His firm oversees US$646 billion. "There's no guarantee that what the company owns, the company will be able to keep in the long run. The US is in a better position."