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    COVID Wipes US$22 Trillion From Publicly Traded Companies

    Brand Finance’s analysis of 55,000 publicly listed, branded companies worldwide found that their total enterprise value dropped from US$116.6 to US$94.8 trillion between January and April though it bounced back to $121.0 trillion in September.

    By The Staff - Oct 29, 2020
    COVID Wipes US$22 Trillion From Publicly Traded Companies

    Around US$22 trillion was wiped off the value of publicly listed companies in the first quarter of 2020 as the COVID-19 pandemic spooked markets, investors and consumers, but new research from Brand Finance, published in partnership with the International Advertising Association, shows that brands have the power to fuel an economic recovery.

    Brand Finance’s analysis of 55,000 publicly listed, branded companies worldwide found that although their total enterprise value dropped from US$116.6 to US$94.8 trillion between January and April, it bounced back to $121.0 trillion in September.

    According to the IMF the global economy as a whole is forecast to contract by -4.4% this year, yet branded companies that convey trust to consumers, like Apple, Amazon, Microsoft, Tesla and Visa, have already bounced back from the decline caused by the COVID-19 crisis to record growth of 3.8%.

    Brands are among the most valuable assets in a company, accounting for around 20% of total business value on average, according to Brand Finance.

    “This report shows us that the importance of brands increases during times of crisis.”

    “Brands communicate the origin, quality and authenticity of a product, but they also convey trust, identity, pride, passion, creativity, innovation and optimism. Strong brands restore consumer confidence, and brand competition can rebuild economic strength,” said Dagmara Szulce, Managing Director of IAA. “We call on governments and brand owners around the world to work together to create an environment that gives consumers the confidence to invest in brands that matter to them; to foster an environment where brands are protected, nurtured and allowed to fulfill their full potential.”

    “This report shows us that the importance of brands increases during times of crisis, and that is why we are launching our global multi-channel campaign, Why Brands Matter.”

    Brands are there to protect consumers from the risks that are posed by unregulated, illegal or counterfeit products, giving consumers peace of mind in their purchasing decisions.

    “In times of crisis, brands – especially those most valuable and strongest in their categories and markets – become a safe-haven for capital,” said David Haigh, CEO of Brand Finance.

    “Like gold or fine art during past economic downturns, nowadays well-managed, innovative, and reputable brands are what the global economy turns to in the hour of need. There can be no better evidence for why brands matter than the role they have already played and will continue to play in the post-COVID recovery.”

     

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