General Motors is now cheaper than Maruti!

BL Research Bureau

Chennai, Nov. 21 What are some of the world’s largest companies worth after this year’s carnage in the stock markets?

With its stock price taking a nosedive, US-listed General Motors today sports a market capitalisation of just $1.7 billion. That makes it cheaper than Indian car maker Maruti Suzuki, which is valued at $3 billion. Investors should note that GM’s market cap was leagues ahead of the Indian car maker barely 10 months ago, at $14 billion. Ford Motors, with its market cap of $3.3 billion after its recent battering, is now just marginally more valuable than Maruti.

Financials dented

Financials and commodity stocks are the ones to have taken the biggest plunge in values after automobile stocks, in the recent rout.

Citigroup has seen its market cap plunge to $26 billion, less than a fifth of its levels in December 2007. That’s narrowed the gap between Citi and the home-grown SBI, which sports a market cap of about $15 billion today.

Aluminium giant Alcoa is now worth one-sixth of its market value 10 months ago, at $5.5 billion. That’s just three times the market value of domestic aluminium major Hindalco (though it is India-listed, Hindalco has a global presence due to its overseas acquisitions).

While US-listed retailing and consumer giants such as Wal-Mart and P&G have fared much better in the recent meltdown, tech and telecom companies have seen their market values pruned by half. But they still continue to dwarf Indian companies in a similar business.

Even after the decline in stock prices, IBM and AT&T are valued at six-seven times their Indian counterparts Infosys and Bharti Airtel, in market cap terms.

Better off still

On an overall reckoning though, US stocks have fared much better than Indian ones, in terms of the damage to investor wealth in 2008. While US stocks have seen their overall market cap shrink by 50 per cent this year, the Indian markets have lost over 70 per cent in value.