The purge of the banking sector in the USA

The purge of the banking sector in the USA

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purge of the banking

The financial sector remains the most popular in the list of the 100 biggest companies. However, the crisis has made a radical clean and its weight has fallen from 29 to 19 representatives. Only those banks that were able to fish in troubled waters following the bankruptcy of Lehman Brothers, seizing rivals at bargain prices, remain in the ranks. The first entity by market is Wells Fargo (280,210 million), which was strengthened with the acquisition of Wachovia and is now in tenth place. Something similar happens to JPMorgan (14th) which absorbed at the time of Bear Stearns. Instead, the British banking and continental Europe has been virtually expelled from the classification. The difficult real estate digestion, the complexity of making money at historically low rates and increased regulatory factors are weighing like a slab for entities on the continent.

Other losers of the upheaval in corporate aristocracy we attended in recent years is the energy sector. The fall in demand due the lower economic growth has been coupled with the development of the technique of fracking. The consequence of this cocktail is the poker game played by leading oil producers,  where Saudi Arabia is leading the way, and the consequent collapse of the price of crude oil below $ 50. The number of energy companies in eight years has gone from 22 to just eight, putting its weight on levels of year 2000, when the market only had eye for “dotcoms”.

On the contrary, one of the booming sectors is clear pharmaceuticals, as well as all business related to the area of ​​health. In your case two key factors combine takeoff: first the aging population and increased life expectancy; and secondly the obsession with winning size thanks to mergers and acquisitions. In a global world a golden principle is to build scale quickly in order to prevent the entry of new competitors, rivals weaken price sensitive and build market share. Drug makers have been large predators in the past two decades and already accumulated 17 members in the 100 largest companies in the world, establishing itself as the second most represented industry. Johnson & Johnson is the eighth largest company in the world, followed by Novartis and Roche, Swiss 16th and 17th respectively, and Pfizer in 19th place.

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