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News : Global Economy Last Updated: Jan 28, 2011 - 5:38 AM

Standard & Poor's says top 50 non-financial global publicly traded companies have cash hoard of over $1trn
By Finfacts Team
Jan 28, 2011 - 5:32 AM

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President Barack Obama looks at a turbine rotor while touring the General Electric plant in Schenectady, New York, with Jeff Immelt, CEO and Chairman of General Electric, left, and Kevin Sharkey, GE Infrastructure/Plant Manager, Jan. 21, 2011.

The S&P Valuation and Risk Strategies research group, is an independent research team at the credit ratings agency Standard & Poor's, and it has estimated that the top 50 non-financial global publicly traded companies have a cash hoard of over $1trn.

In the US, data from the Federal Reserve in respect of the third quarter of 2010, showed that non-financial US public companies held cash or cash equivalents, amounting to almost $1.9trn. Within that universe, the companies of the S&P 500 account for about $920bn of the total.

The jump in cash holdings reflect spending cuts and restructurings during the recession but also a response to low interest rates. The December Fed flow of funds statement (pdf) shows US corporate debt at a record high of $7.3trn. Cash as a % of this debt was at 26.4%.

S&P says in the past, much discussion among market participants, as well as commentary from Valuation and Risk Strategies Research, focused on the growing levels of cash and short-term investments that American corporations hold. Increased productivity and a recovery in earnings have, at least in part, fueled this bounty. To that end, investors have witnessed pick-ups in corporate stock buybacks, dividend payouts, and merger and acquisition activity. But what about the rest of the world? From the perspective of the global economy, where do US corporations rank relative to their counterparts worldwide in term of cash holdings?

With the help of Capital IQ data, the S&P research team examined the top 50 publicly traded companies globally, excluding financials, ranked by their latest reported quarter's total cash and short-term investment holdings. As indicated in the table below, the sum total for these companies' cash balances is approximately $1.08trn -- nearly matching the cash holding total for the entire S&P 500 Index.

S&P found 17 US-based companies among the top 50 global corporate cash holders -- which means that among specific nations, two-thirds of the top 50 global cash holding companies are headquartered outside of the US.

The team says from the perspective of dollar amounts, the 17 US companies account for $458.2bn, or about 42%, of the top 50's global cash holdings. Meanwhile, the cumulative cash holdings of the 13 companies located in Asia and Australia, among the 50 below, amount to more than $270.1bn, or about 25% of the group's total. In Europe, S&P identified 17 companies among the top 50 global cash holders with an aggregate cash holding total of $287.7bn, or about 27% of cash balances among the global top 50.

S&P says when considering the magnitude of corporate cash balances, investors would be well served to look at a variety of geographic locales. With the abundance of capital abroad, the likelihood exists for greater activity in cross-border mergers and acquisitions as well as for strong earnings growth outside the US To that end, the list below could serve as a starting resource for ideas on who may be buying, where deals could occur, and possibly where profits may emerge.

Top 50 Global Companies (Excluding Financials) By Cash Holdings
Company Total cash and short-term investments, latest quarter (Mil. $) Primary industry classification Location of headquarters
General Electric Co. 78,392.0 Industrial conglomerates United States
Toyota Motor Corp. 48,304.8 Automobile manufacturers Japan
China Mobile Ltd. 46,786.0 Wireless telecommunication services Hong Kong
Microsoft Corp. 43,253.0 Systems software United States
Cisco Systems Inc. 38,925.0 Communications equipment United States
Petroleo Brasileiro S.A. - Petrobras 34,658.9 Integrated oil and gas Brazil
Volkswagen AG 34,632.2 Automobile manufacturers Germany
General Motors Co. 33,476.0 Automobile manufacturers United States
Google Inc. 33,380.0 Internet software and services United States
Total S.A. 27,081.0 Integrated oil and gas France
Apple Inc. 25,620.0 Computer hardware United States
Oracle Corp. 24,845.0 Systems software United States
Ford Motor Co. 23,659.0 Automobile manufacturers United States
Panasonic Corp. 23,583.1 Consumer electronics Japan
Pfizer Inc. 23,204.0 Pharmaceuticals United States
Electricite de France S.A. 22,317.2 Electric utilities France
Johnson & Johnson 22,126.0 Pharmaceuticals United States
Siemens AG 20,752.7 Industrial conglomerates Germany
Intel Corp. 20,750.0 Semiconductors United States
WellPoint Inc. 20,070.3 Managed health care United States
Enel SpA 19,288.1 Electric utilities Italy
Samsung Electronics Co. Ltd. 19,107.1 Semiconductors South Korea
Amgen Inc. 17,049.0 Biotechnology United States
Nippon Telegraph & Telephone Corp. 16,547.4 Integrated telecommunication services Japan
Fiat SpA 16,399.7 Automobile manufacturers Italy
Mitsui & Co. Ltd. 16,262.3 Trading companies and distributors Japan
PetroChina Co. Ltd. 16,087.3 Integrated oil and gas China
Sony Corp. 16,072.0 Consumer electronics Japan
Vodafone Group PLC 15,160.6 Wireless telecommunication services United Kingdom
Honda Motor Co. Ltd. 15,137.7 Automobile manufacturers Japan
Mitsubishi Corp. 14,740.6 Trading companies and distributors Japan
Chevron Corp. 14,534.0 Integrated oil and gas United States
Nokia Corp. 14,486.8 Communications equipment Finland
Saudi Basic Industries Corp. 14,431.1 Commodity chemicals Saudi Arabia
BP PLC 14,354.0 Integrated oil and gas United Kingdom
America Movil S.A.B. de C.V. 14,164.2 Wireless telecommunication services Mexico
Endesa S.A. 13,742.3 Electric utilities Spain
Dell Inc. 13,381.0 Computer hardware United States
European Aeronautic Defence and Space Co. N.V. 13,285.8 Aerospace and defense Netherlands
Coca-Cola Co. (The) 13,265.0 Soft drinks United States
Daimler AG 13,220.6 Automobile manufacturers Germany
GDF SUEZ S.A. 13,130.2 Multi-utilities France
China Shenhua Energy Co. Ltd. 13,005.2 Coal and consumable fuels China
BMW AG 12,709.7 Automobile manufacturers Germany
JSC Gazprom Neft 12,528.0 Integrated oil and gas Russia
PSA Peugeot Citroen 12,482.3 Automobile manufacturers France
BHP Billiton Ltd. 12,479.0 Diversified metals and mining Australia
ExxonMobil Corp. 12,259.0 Integrated oil and gas United States
Iberdrola S.A. 12,125.5 Electric utilities Spain
Nintendo Co. Ltd. 12,037.3 Home entertainment software Japan
Data as of Jan. 7, 2011. Source: Capital IQ.

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