30 Jul 2020
Posted in Business Fundamentals
Consumer and retail sectors dominate GlobalData’s list of top 50 APAC companies by market cap in Q2 2020
Consumer and retail sectors have topped GlobalData’s list of the top 50 companies in the Asia-Pacific (APAC) region with an impressive growth in their market capitalization (M Cap) during the second quarter (Q2) ended 30 June 2020.
An analysis of GlobalData’s Company Profiles Database reveals that even while countries continue to reel under the COVID-19 pandemic, the aggregate M Cap of the top 50 companies in APAC witnessed a substantial 16.5% quarter-on-quarter (QoQ) increase from US$5.7 trillion to US$6.6 trillion by the end of June 2020.
Technology, retail, consumer and pharmaceuticals, which accounted for 54% of the companies in the top 50, witnessed M Cap growth of 19.8%, 25.4%, 28.2% and 16.1%, respectively.
Anindya Biswas, Company Profiles Analyst at GlobalData, comments, “Technology sector benefited from the growing demand for video-conferencing, as work and education move to the safe confines of people’s homes through digital platforms. The adoption of new technologies such as 5G, contactless payments and artificial intelligence were some of the drivers for the rise in the M Cap in this sector.”
Tencent Holdings, Meituan Dianping, SoftBank Group and NetEase were the major gainers as they contributed a composite M Cap of US$898bn, a 41% improvement against Q1 2020.
Biswas adds: “The retail sector in the region saw a major leap in its M Cap majorly on the back of impressive performances by the Chinese retailers such as Alibaba, JD.com Inc, Pinduoduo and Fast Retailing. Alibaba reported growth in M Cap in Q2 2020 as a result of increase in sales from advertising and rise in income via domestic and international third-party resellers.”
The M Cap of consumer sector registered strong growth with Kweichow Moutai, Wuliangye Yibin, Hindustan Unilever and the Midea Group registering QoQ rise of 31.7%, 48.5%, 2.9% and 23.8%, respectively. The sector continued to be influenced by the growing trend of artificial intelligence and personalization of products.
Biswas continues: “Pharmaceuticals continue to be driven by the impact of COVID-19 pandemic. Investors bet on pharmaceutical companies to come out with novel COVID-19 vaccines, and increased demand for healthcare solutions made the sector a preferred one for investors.”
The financial services sector remained relatively flat with slight increase of 2% in its M Cap. The oil and gas sector received a setback as the oil prices crashed primarily due to decline in demand and the ongoing price wars between Saudi Arabia and Russia. On the other hand, companies in sectors such as power, automotive and mining experienced a surge in their M Cap.
Biswas concludes: “While Q2 witnessed the resilience of players across different sectors attempting to stay afloat by taking initiatives to return to a state of normalcy, Q3 could see the impact of initiatives being undertaken by these companies as countries ease up the COVID-19 related lockdown measures.”