Chinese companies have dropped out of the ranks of the world’s 10 biggest stocks by market value for the first time since 2006.
Bloomberg News reports that this came amid a cash crunch, slower growth and the biggest United States stock rally in a decade.
PetroChina Company, the state oil producer that was the world’s sixth-biggest company in May, lost $35bn in market value this month to $214bn, dropping to 12th, according to data compiled by Bloomberg based on closing prices.
Industrial & Commercial Bank of China Limited fell by four places to 13th after losing $28bn.
All of the 10 largest stocks are from the US after Johnson & Johnson, the top maker of health-care products, and Wells Fargo & Company overtook the Chinese firms.
Chinese shares are underperforming US equities by the most since 1998 as the American housing and jobs markets improve. Stocks in the world’s second-largest economy, which climbed 345 per cent over the past decade and accounted for half of the world’s top 10 in 2007, are falling as the country struggles to develop a consumer market.
“Investors are looking at the US because there are actually signs of growth, versus China where it’s exactly the opposite,” Wayne Lin, a money manager at Baltimore-based Legg Mason Inc., which oversees about $654bn in assets, said in telephone interview.
“What you see is really the growth expectations flipping.”
Credit Curbs
The Shanghai Composite Index of domestic shares fell by 0.1 per cent to a four-year low amid concern the government’s curb on credit expansion may damp economic growth.