The Top 100 Non-Financial Firms Ranked By Foreign Assets 2013

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The ING Erasmus Top 100 was published by the Rotterdam School of Management in Dec, 2013. The list comprised of the top 100 non-financial firms ranked by foreign assets.

The top 20 firms from the ranking is shown in the table below:

RankCompanyCountryIndustryForeign Assets in 2013 (USD millions)
1General ElectricUSAConglomerate338,157
2Royal Dutch/ShellUK-NetherlandsOil & Gas307,938
3BPUKOil & Gas270,247
4Toyota MotorJapanAutomotive232,749
5TotalFranceOil & Gas214,328
6VodafoneUKTelecommunications195,630
7Exxon MobilUSAOil & Gas195,046
8GDF SuezFranceElectric Utilities174,911
9ChevronUSAOil & Gas158,865
10CNPCChinaOil & Gas158,775
11VolkswagenGermanyAutomotive157,914
12ENIItalyOil & Gas132,666
13NestléSwitzerlandConsumer Goods132,501
14E.OnGermanyElectric Utilities128,203
15AB InBevBelgium-BrazilBeverages & Tobacco115,913
16EnelItalyElectric Utilities115,331
17ArcelorMittalLuxembourgSteel112,239
18SiemensGermanyConglomerate111,986
19Honda MotorJapanAutomotive110,265
20MitsubishiJapanAutomotive109,449

Source: ING Erasmus 100,Rotterdam School of Management, ING Economics Department, December 2013

The U.S. had the most number of firms in the list with 23 firms.The majority of the 100 companies are from the US, Developed Europe and Japan.

It is not surprising to see oil and auto companies top 20 shown above. The full list of rankings can be found in the link above.

The Top 10 Global Companies Based on Foreign Sales

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Some of the multinational firms derive a very high percentage of sales relative to total sales from countries outside of their home countries.Ten such firms from the ING Erasmus 100 Top International Firms published in Dec 2013 are listed below:

RankCompanyForeign Sales/Total Sales (in 2013)
1Roche Group98.90%
2Novartis98.80%
3Liberty Global98.60%
4SAB Miller98.40%
5Nestlé98.40%
6Royal Philips97.30%
7Hon Hai Precision97.20%
8Teva Pharmaceutical96.90%
9Barrick Gold96.60%
10Rio Tinto96.20%

Source: ING Erasmus 100,Rotterdam School of Management, ING Economics Department, December 2013

Pharmaceutical companies dominate the list with Swiss-based Roche Group(RHHBY) having almost all of its sales outside Switzerland.The world’s largest generic drug market Teva(TEVA) of Israel also high foreign sales.According to the authors of the report:

US firms score relatively low on this ranking due to their large home market. Firms like Wal-Mart, General Motors, Ford, Microsoft and PepsiCo all obtain less than half of their sales abroad.

Disclosure: No Positions

How To Profit From Lower Oil Prices

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Oil prices have been stable up until recently at around $110 price per barrel and $100 seemed to be the floor.However since mid-June this year prices have plunged dramatically to below $60 per barrel. On Friday Brent crude oil closed at  $61.38 for February, 2015 delivery on the NYMEX.

There are many ways to profit from the decline in oil prices. One way is to buy the stocks of major oil producing giants such as BP Plc(BP), Royal Dutch Shell PLC (RDS.A, RDS.B), Exxon Mobil Corp (XOM), Total SA (TOT), etc as their stock prices are cheaper at current levels and they have attractive dividend yields as well.This strategy is not the best move since there is no guarantee that oil prices will quickly recover and dividend payments may be cut when earnings take a hit. A better way to take advantage of the lower oil prices is to invest in companies operating in the consumer staples and consumer discretionary sectors. As consumers spend less on gasoline they are left with extra cash to spend on consumer goods and services.

From a recent article by UK-based Clare Hart, Manager of the JPMorgan US Equity Income Fund:

Given the significant recent decline in oil prices and subsequent market volatility, it is worth considering what this means for investors in US equities.

With the exception of the very end of last week, US equity markets have for the most part continued to grind higher as investors have shrugged off the vicious collapse in crude oil prices and instead focused on increasing central bank accommodation and continued strength in the US economy.

In our view, lower oil prices should also act as a beneficial tail wind for the US consumer. US families with income below $50,000 (£32,000) on average spent about 20-25 per cent of their total household income on energy.

Further, approximately 60 per cent of Americans spent nearly 15 per cent of their discretionary spending on gas. Lower energy bills should leave consumers with more dollars in their pockets to spend on goods and services, which should benefit overall consumer spending.

Source: What falling oil prices can mean for US equity dividend investors, Dec 19, 2014, Money Observer

Generally one could go no wrong investing for the long-term in consumer staples companies.Even when gasoline prices were much higher they were able to generate solid earnings and pay decent dividends consistently.

Ten U.S. stocks in the consumer staples sector are listed below with their current dividends for consideration:

1.Company: Kellogg Co (K)
Current Dividend Yield: 2.93%
Sector:Food Products

2.Company: General Mills Inc (GIS)
Current Dividend Yield: 3.05%
Sector: Food Products

3.Company:Colgate-Palmolive Co (CL)
Current Dividend Yield: 2.06%
Sector: Household Products

4.Company:Procter & Gamble Co (PG)
Current Dividend Yield: 2.80%
Sector: Household Products

5.Company: Mondelez International Inc(MDLZ)
Current Dividend Yield: 1.61%
Sector: Household Products

6.Company:Kraft Foods Group Inc(KRFT)
Current Dividend Yield: 3.46%
Sector: Household Products

7.Company:Campbell Soup Co(CPB)
Current Dividend Yield: 2.82%
Sector: Household Products

8.Company: ConAgra Foods Inc(CAG)
Current Dividend Yield: 2.71%
Sector: Household Products

9.Company:The Clorox Co (CLX)
Current Dividend Yield: 2.83%
Sector:Household Products

10.Company: Kimberly-Clark Corp (KMB)
Current Dividend Yield: 2.90%
Sector: Household Products

Note: Dividend yields noted above are as of Dec 19, 2014. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.

Disclosure: Long GIS

A Note On The Market Capitalization Of Russian Stock Market

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The stock market capitalization of the Russian is small compared to the U.S. market. The total market cap of the US market is in the Trillions of dollars while the Russian market is just a couple of hundred billion dollars. Back in January The Economist published the following graph showing the market caps of select countries:

Click to enlarge

Russia Market Cap

Source: The Economist

At that time the market cap of Russian market was about $223.0 billion which was equivalent to the market cap of Proctor & Gamble (PG) at that time. By November this year, the market cap of tech giant Apple (AAPL) exceeded that of the Russian market as the share prices of Russian stocks fell. As we approach the end of the year, Russia has been hit hard by the crash in crude oil prices. Russian oil companies such as Gazprom(OGZPY) and LUKOIL (LUKOY), dominate the equity market and oil and natural gas are the major exports of the country. A recent article in Marketwatch noted that the market cap of Google(GOOG) is bigger than the entire Russian equity market.

Goog-Russia Market Cap

 

Source: Google is now bigger than Mother Russia’s entire market,  Dec 18, 2014, Marketwatch

Related ETF:

  • Market Vectors Russia ETF (RSX)

Disclosure: No Positions

Vanguard: A Comparison Of Chinese And US Housing Markets

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The U.S. housing market is highly different than housing markets in other countries.For example, unlike in most countries mortgages in most of the U.S. are are non-recourse loans which means borrowers can default on their loans and simply walk away free while the lender takes the loss.

I wrote a post back in 2012 comparing the housing markets of U.S. and Canada. A similar comparison can be made between the housing market in the US and Australia, Germany, France, UK, etc. I came across an interesting article in the Vanguard Blog for Advisors showing how the U.S. housing market is different than the housing market in China. For many years now, many people have predicted the collapse of the Chinese housing market. For example, in 2011 the “ghost” city of Ordos in Inner Mongolia became a popular media story on the Chinese housing bubble.

Click to enlarge

“Empty” City of Ordos, Inner Mongolia, China (in 2011)

China/ Ordos/ Geisterstadt

China/ Ordos/ Geisterstadt

 

Photos Source: Der Spiegel

From China won’t export housing crisis by Joe Davis of Vanguard:

China vs US Housing market

In the United States, many investors took out speculative loans on houses they could not afford. In China, lending standards have not loosened. Subprime mortgage loans with minimal down payments do not exist there. Chinese homebuyers must put down at least 30%—and often more than that for a second home. They also can’t walk away from their debts easily because they lack the no-recourse loans that allowed underwater U.S. borrowers to wash their hands of their housing debt. Mortgage securitization, a major factor in the global financial crisis, is also less prevalent in China than in the United States. Overall, the Chinese housing boom is missing the leverage that accelerated the housing bonfire here.

Furthermore, compared with the housing market in the United States, China’s housing market is relatively young and represents a smaller part of the economy. Homeownership took root only in 1998, when Chinese officials began eliminating the state-run housing system.

Finally, the key difference in China is that most of the risk lies with real estate developers and local governments, who have borrowed excessively and left many cities with an oversupply of housing. In fact, revenue from land sales is about one-third of local government revenues, and many local government funding vehicles use land as collateral for their borrowing. Bad loans could emerge in the future if banks tighten lending, and housing and land demand slows.

Mr.Davis makes many compelling arguments above. Investors waiting for a collapse of the Chinese economy due to a crash in the real estate market are mistaken. China’s market is nowhere near the levels of the craziness that occurred in the US housing bubble. Shocking stories of some illegal in California with barely any income getting a mortgage for $500,000 with $0 down payment is not unheard when the bubble crashed. Such scenarios are unlikely to occur in China.Chinese banks have strict lending standards even for local citizens.