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The Boston Globe: THE GLOBALIST QUIZ: Global heavyweights

November 26, 2006

Large corporations are experiencing a boom phase around the world. With profits often at, or very near, record levels, their total stock market value is also rising. Which of the following companies is the only one that ranks among the world’s five most valuable companies, measured by stock market capitalization?

A. Toyota B. BP C. Wal-Mart D. Gazprom

A. Toyota is not correct.

Toyota is on track to become the world’s largest automotive company. It already produces more cars than Ford on a global basis and, given General Motors’ s current troubles and cutbacks, could be producing more vehicles than GM by year’s end.

Despite all its successes, Toyota does not rank among the world’s 10 most valuable companies at present. With a market value of $188 billion, it ranks in 13th place worldwide, according to Thomson Financial.

B. BP is not correct.

The oil industry generated record profit levels in 2005 and has continued to do so in 2006. At the same time, there is quite a bit of uncertainty surrounding the big oil companies. The problems range from production safety issues and environmentally harmful spills to questions about their real reserve levels.

As a result, neither Royal Dutch Shell nor BP ranks among the five most valuable companies in the world, coming in seventh and eighth place, respectively. Still, their market capitalization in each case exceeds the $200 billion level.

C. Wal-Mart is not correct.

Wal-Mart is the world’s biggest retailer, with more than 3,900 stores in the United States and 828 in Mexico alone. Ever since current CEO Lee Scott took over the company in January 2000, however, Wal-Mart’s stock price has declined by about 30 percent.

The main reasons for this development are tough competition in overseas markets, market saturation at home, and especially the stagnant income levels experienced by Wal-Mart’s U S customers. With just around $200 billion in market value, the company ranks 11th worldwide.

D. Gazprom is correct.

Gazprom is the world’s largest natural gas company and, under the guidance of President Vladimir Putin of Russia, is also expanding its oil portfolio. Forty-nine percent of the company’s shares were listed for the first time in December 2005.

The company’s market capitalization is around $256 billion, making it the world’s fourth biggest company as measured by stock market valuation. It ranks just behind ExxonMobil, General Electric, and Microsoft and just ahead of Citigroup, the world’s most highly valued financial services firm.

The Globalist Quiz is produced by The Globalist, a Washington-based research organization that promotes awareness of world affairs. © 2006 The Globalist, www.theglobalist.com.

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