[Super Rich] 'Bul Myeongpum Jaebeol' LVMH, First European Company to Surpass $500 Billion Market Cap

by Kwon Haeyoung

Published 25 Apr.2023 10:38(KST)

Updated 25 Apr.2023 11:22(KST)

Expansion of Chinese Luxury Demand and Euro Strength
Tesla Closely Chasing $505 Billion Market Cap
Arnault Chairman's Stake Value Rises to $212 Billion

Editor's Note'Stand on the shoulders of giants.' This is one of the widely known investment adages. By paying attention to the eyes and mouths of the super-rich, you can see the direction of money. We deliver everything interesting about the investment trends, words, interests, and movements of the big players who move the global markets. We also deliver news that may interest investors who are currently salaried workers but dream of financial freedom. Please pay attention to the Super Rich corner, which contains vivid global investment news.
Bernard Arnault, Chairman of LVMH

Bernard Arnault, Chairman of LVMH

원본보기 아이콘

The market capitalization of the French luxury company Louis Vuitton Mo?t Hennessy (LVMH) surpassed $500 billion (approximately 665.8 trillion KRW) for the first time among European companies. The expansion of luxury demand due to the recovery of the Chinese economy pushed up the stock price. The value of Bernard Arnault, chairman of LVMH's shares, also increased to $212 billion (approximately 282.3 trillion KRW).


On the 24th (local time), LVMH's stock price closed at 903.7 euros, up 0.3% from the previous trading day, on the Paris Euronext exchange, achieving a market capitalization of 454 billion euros.


In US dollars (1 dollar = 1.1 euros), it recorded $500.3 billion, becoming the first European company to surpass a market capitalization of $500 billion. Thus, LVMH reclaimed the title of the first European company with a market cap exceeding $500 billion about two weeks after entering the global top 10 by market capitalization. It also closely chased Tesla ($505 billion), the 9th largest global company by market cap, whose stock price fell 23% this month alone.


As LVMH's stock price rose, the value of Bernard Arnault's shares increased to $212 billion. Born in 1949 and aged 74, Arnault surpassed Elon Musk, CEO of Tesla, this year to become the richest billionaire in the world. According to the Bloomberg Billionaires Index, Arnault's net worth is $212 billion, far ahead of Musk, who ranks second with $165 billion (approximately 219.7 trillion KRW).


The main drivers of this LVMH stock rally are the improvement of the Chinese economy, a major player in the luxury market, and the strength of the euro.


LVMH, which owns Louis Vuitton, Hennessy, Sephora, and others, saw its sales increase by 17% in the first quarter of this year, thanks to the expansion of luxury demand in China. This was due to the reopening measures China took at the end of last year, which unleashed pent-up consumption suppressed since COVID-19. Price increases in leather goods and bags also contributed to higher margins.


Additionally, the rise in the euro's value against the dollar, amid concerns about a US economic recession, also had a positive effect. Expectations that the Federal Reserve (Fed) will cut interest rates within the year spread in the market, pushing the euro to its highest level against the dollar in a year this month.


There are also predictions that LVMH's stock price will surpass 1,000 euros. Ashley Wallas, a researcher at Bank of America (BoA), analyzed, "LVMH's stock price will surpass 1,000 euros next year," adding, "Considering the attractiveness of the luxury sector and the strong brand portfolio, it is still too cheap."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.