Source: TOI, 15 Sept 2018
India ranks third globally in terms of the number of family-owned-businesses with 111 companies having a total market capitalization of $893 billion. India closely follows China with 159 firms and the US with 121 firms, says a report.
According to the ‘Credit Suisse Family 1000 in 2018’ study, published by the Credit Suisse Research Institute(CSRI), in terms of a number of family-owned businesses within the non-japan Asian region, the list is dominated by China, India and Hong Kong. These three jurisdictions together account for around 65% of the non-Japan Asian section of CSRI’s database and have a combined market capitalization of $2.8 trillion (or 71%) of the market share.
Korea came in fourth place, with 43 companies($434-billion market capitalisation), followed by Indonesia, Malaysia, the Phillippines and Thailand, each with 26 companies, There port covered 11 markets in the non-Japan Asian region, which continue to dominate and represent a 53% share of the universe, with a total market capitalisation of over $4 trillion.
The report further noted that in 2017 alone, non-Japan-Asia- Based family-owned companies generated 25.6% greater cash flow return on investment (CFROI) than their non-family-owned counterparts, and delivered a 4.2% outperformance in annual average share price return since 2006.
Credit Suisse head analyst (thematic investments) and the report’s lead author Euge-ne Klerk said, “ This year, we find family-owned businesses are continuing to outperform their peers in every region, every sector, whatever their size. We believe this is down to the longer-term outlook of family-owned businesses relying less on external funding and investing more in research and development.”
Indian family-owned companies generated a 13.9% annual average share price return since 2006, compared to 6% recorded by their non-family-owned peers, the report said. Further, out of the top 50 most profitable companies globally, 24 were from Asia, with a total market capitalization of $748 billion. The list included 12 Indian family-owned companies with a total market capitalization of $192 billion.
Additionally, in non-Japan Asia, more than 50% of the top 30 best-performing companies are from India, followed by one-third from China. Malaysia occupies third place with three companies, while Korea and Indonesia each have one, the report added.