COMPRESSED MATTER: WHY YOUNGER & FASTER MEANS BIGGER
While the US population is 500% bigger than the UK’s, size alone does not account for the discrepancy in economic success of the top 5 stocks listed in the US and the UK. Selecting a sector where it is possible to create highly exponential rates of growth, so-called hyperscaling, is perhaps an even more important factor.
This is why the five biggest US stocks by market cap are more than 12x larger than the UK’s but one fifth of the average age (the average age of the UK’s top five is c 150 years versus 32 years in the US). Also, the average market cap of the US top five is US$1.4tn, while no single company listed in the UK is worth more than a tenth of that.
| Company | Market cap (US$tn) | Age | Market cap (US$tn) | Age |
|---|
| Apple Inc | 2.02 | 45 | Unilever | 0.14 | 92 | |
| Microsoft Corp | 1.71 | 46 | AstraZeneca | 0.12 | 108 | |
| Amazon.com Inc | 1.5 | 27 | HSBC | 0.14 | 136 | |
| Alphabet Inc | 1.38 | 23 | Rio Tinto | 0.1 | 148 | |
| Facebook Inc | 0.73 | 17 | Diageo | 0.1 | 272 | |
| Total | 7.34 | 158 | 0.58 | 756 | ||
| Average | 1.47 | 31.6 | 0.12 | 151 |
Source: Thomson Reuters at 5 March 2021. Note: *Ages based on the oldest direct ancestor of present legal entity.
To quote Lord Hill’s report of last week, ‘the most significant companies listed in London are either financial or more representative of the ‘old economy’ than the companies of the future.’
What does this mean? Could the UK change its trajectory? If so, how? We would very much like to hear your thoughts on our Twitter and LinkedIn feeds. Our analysts will be joining the discussion as well.
