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Already life assurers have been hurting policyholders, shareholders, or both, in order to strengthen their capitalisation.
Despite billions of dollars of public money, Japan's banks are still in a parlous state, which is exacerbated by the falling stockmarket: their capitalisation fluctuates with the value of their massive investments.Last week, in response to the alarming industrial production figures, the Bank of Japan, the central bank, cut overnight interest rates by the tiny percentage of 0.1, to 0.15%.
The Financial Times picks up figures from Thomson Financial data, saying that Europe's 24 stock markets, including Russia's, saw their capitalisation rise to €11,819 billion ($15,720 billion) at the end of last week, exceeding the $15,640 billion market value of America's bourses.The European Union and Australia have been trading insults over who is the greenest of them all.
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As share prices soared, people pointed to the growing gap between the book value of companies (what appeared in their accounts) and their market capitalisation (valued on stock exchanges) as evidence of the irrelevance of accounts.
They measured the market value added (MVA) by companies, the change in their outstanding debt and their stockmarket capitalisation.
Technology companies such as Dell, Intel, Apple, IBM, banks such as Chase Manhattan and a host of other companies collectively had hundreds of billions of dollars wiped off their market capitalisation when they announced their results.
Two publicly traded firms, CMGI and Internet Capital Group, have each lost over 90% of their market capitalisation, and "investors are questioning their ability even to survive".TCV itself had written off four of its companies by the end of September, and several others had required "significant attention".
In a report due on April 23rd, the SEC's Advisory Committee on Smaller Public Companies was expected to recommend that companies be exempted from Section 404 if their market capitalisation is less than $128m and their revenues are under $125m.
Each firm's weight in the index reflects their market capitalisation multiplied by China's share of their revenues.
The weight of each of these 133 firms in the index reflects their market capitalisation multiplied by China's share of their revenues.
It is a simple enough notion, you might think: the ratio of (a) the value of companies according to Wall Street (their market capitalisation) to (b) the replacement cost of their assets.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com