Some of the world’s largest companies and richest individuals have seen their fortunes grow at a staggering pace over recent years, with unimaginable fortunes being made. In fact the total global wealth at the end of 2019 was a staggering $360.6 trillion.
However even the wealthiest companies and billionaires aren’t immune to the impact of the coronavirus and according to Forbes, some 51% of current billionaires are worth less than they were last year.
KIS Finance have investigated where the world’s wealth is currently located, leading us to compare the world’s richest countries, most profitable companies, and wealthiest individuals. We’ve explored how the Coronavirus is affecting global wealth and have found some very interesting results.
Notable statistics in this report
A country’s wealth is determined by its GDP (Gross Domestic Product). This is a measure to determine the size and health of a country’s economy over a period of time by calculating the value of all the goods made and services provided during a specific period. GDP can be used to compare different economies.
The following list shows the world’s current top 25 countries in order of their nominal GDP
When you look at these countries and determine their shares of the total global economy, the results are impressive. According to International Monetary Fund (IMF) data, the USA alone makes up 23.6% of the world’s economy, followed by China with 15.5%.
If you combine the nominal GDPs of the top 10 economies in the world, this adds up to 66% of the world’s economy. The top 20 economies contribute just under 79%.
This means that the remaining 173 countries together constitute less than a quarter of the world’s wealth and less than that of the USA.
What’s really interesting is that certain individual companies are worth huge amounts more than many countries in the world.
A company’s wealth is determined by its market capitalization. This is calculated by multiplying the number of shares issued by the company by the value of one of these shares. Market capitalization is one of the methods of evaluating the investment attractiveness of a company.
In January this year the top 10 wealthiest companies in the world, determined by their market capitalisation, were as follows.
At this time if you combined these 10 companies and made their collective market capitalisation equivalent to a GDP, they would sit as the world’s third most wealthy country, only being beaten by the GDPs of the USA and China.
The combined market capitalisation of the top 7 American companies alone in the list above would equal $6.2 trillion, which equates to a massive 29% of the entire USA’s GDP.
The combined market caps of the top 7 US companies is also more than double the GDP of the UK, which currently stands at $2.7 trillion. It’s a staggering fact that just Apple, Microsoft and Amazon alone are worth more than the GDP of the UK with a combined market capitalisation of $3.6 trillion.
The UK isn’t doing too badly as the top 10 wealthiest UK companies have a combined market capitalisation of £978.8 billion ($1.2 trillion). This makes them richer than many countries, including Indonesia, The Netherlands, Saudi Arabia, Turkey and Switzerland in the list of the world’s top 25 richest countries. Their combined market capitalisation is also the equivalent of 44% of the UK’s nominal GDP.
As of February 2020, the top 10 wealthiest companies in the UK, by market capitalisation, were as follows.
However, even the wealthiest companies are feeling the impact of the Coronavirus pandemic and some are seeing their fortunes dramatically affected.
The Coronavirus has impacted particularly hard on companies like Saudi Aramco, a Saudi Arabian based national petroleum and natural gas company, which became the most valuable company last year with a market cap of $1.88 trillion. The impact of the pandemic on the oil market saw some $320 billion shaved off their capital value in just 2 days in March 2020.
In contrast, internet based companies such as Amazon have seen their fortunes grow during the pandemic as people turn to on-line shopping in greater numbers than ever before. Amazon’s share price has in fact grown by an impressive 40% since mid-March, due to the surge in demand following the lockdown. This is leading to talk that Amazon owner Jeff Bezos is on his way to becoming the world’s first Trillionaire!
A few companies have unexpectedly seen their fortunes increase during the pandemic.
Zoom Video Communications have seen their value soar, as the demand for their cloud-based video and audio-conferencing facilities has rocketed over the last couple of months. With businesses needing to facilitate home working for large sections of their workforce, it’s not surprising that Zoom have seen their value rise by over 36% since March 11th, the date that the World Health Organization declared COVID-19 had reached pandemic status. With the likelihood that this may become the new way of working for many businesses for some considerable time, Zoom look set to continue to see a huge boost to their profits.
Netflix has also seen a huge surge in demand following the global lockdown and is now worth more than Disney, with its value soaring to $187 billion.
Kimberly-Clark, who manufacture facial tissues, toilet rolls and own brands like Kleenex, have also seen a rise in their value linked to the pandemic, with shares increasing by 4.2% since March 11th.
As our way of life is likely to continue to be affected by the pandemic for quite some time, we may see some other surprising changes to the companies that top the list of high performers in the future.
Looking at the wealth of some of the richest individuals in the world is quite staggering. They are worth more money than most of us could imagine being able to spend just a fraction of in a lifetime!
As of April 2020, Forbes listed the top 10 wealthiest people in the world by net worth as follows:
Between them, that’s a staggering net worth of $686.4 billion which would place them 21st in the list of wealthiest countries in the world if you were to turn their worth into a GDP.
8 out of the world’s top 10 richest people are American. Between them they have a combined net worth of $555.3 billion. That’s 2.6% of the wealth of the USA, the richest country in the world.
Armancio Ortega’s net worth ($55.1 billion) alone is 4% of the GDP of his home country Spain.
Bernard Arnault’s net worth ($76 billion) alone is 3% of the GDP of his home country France.
The pandemic has, however, taken its toll even on the mega-rich and the total number of billionaires has dropped significantly due to the Coronavirus. Forbes counted 2,095 billionaires at the end of March 2020, that’s 226 less than at the beginning of the same month.
But with the surge in demand for Amazon’s products Jeff Bezos has seen his personal wealth soar to even greater hights, with him estimated to be worth $139 billion in May 2020, well and truly cementing his position as the richest person in the world.
The UK’s billionaires have seen mixed fortunes over the last year with many seeing their wealth reduce as a result of the economic impact of the coronavirus.
According to the May 2020 Times Rich List there are 147 billionaires currently in the UK with a combined wealth of £490.687 billion, a reduction of £34.156 billion from last year.
With 7 out of the top 10 UK billionaires seeing their fortunes drop, many have cited the impact of the coronavirus as the key factor affecting their businesses.
Whilst much of the world’s wealth is still concentrated between a small number of individuals, there are a total of 58 fewer billionaires than a year ago, despite new players joining the list. In fact 51% of billionaires are reportedly poorer than they were last year.
The impact of the Coronavirus on global markets is likely to have a long lasting effect on economies. We’ve seen dramatic falls on the global stock markets, with the Dow Jones reporting its largest ever single day drop of nearly 3000 points in mid-June, when the pandemic really took hold.
It will therefore be interesting to see if the pattern of where the majority of the world’s wealth currently lies will significantly change in the future.
All figures are correct at time of writing
Global wealth – Credit Suisse
Top 20 countries – Investopedia
Top 25 countries – Statistica
Countries’ share of global economy – Investopedia
Top 10 companies – FXSSI
Top 10 billionaires - Forbes
Top 10 UK companies – Disfold (based off of FTSE 100 data)
Top 10 UK billionaires - The Times
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Last updated: 21 May 2020 | © KIS Bridging Loans 2020 |