Analytics - 2022

What does the 2021 data of TOP 101 most valuable companies tell us?

In 2021, COVID-19 pandemic continued to spread and mutate further, but no longer caused similar fear as it did at the beginning of 2020. The first coronavirus vaccines were granted authorisations in December 2020 and became widely used in 2021. The development of vaccines caused overall optimism as this enabled several countries to begin easing restrictions and reopen their borders for travel. 

2021 was marked also by the massive impact of economic recovery programmes launched earlier by central banks. Printing of new money and overall economic optimism started to gradually push up share prices. Various European and American indices reached new peaks. Among others, NASDAQ 100 index climbed 27% to 16,320 points, and Dow Jones Industrial Average was up by 19%. During the year, S&P 500 index rose to new historic record levels 79 times, increasing 27% over the year. Share prices increased rapidly also in the Baltic markets - the overall OMX Baltic Benchmark index was up by 42.01% during this period. 

Estonian economy continued its recovery. Gross Domestic Product (GDP) grew by 8.3% year on year. The main growth engine was the manufacturing industry, which reached or even exceeded pre-pandemic levels. The growth was especially visible in the wood processing sector. Many companies operating in this economic sector increased their revenue and profit between 50% and 80%. 

Last year was also marked by the second pension pillar reform which allowed pension savers to take out their savings and put them into immediate use. In the autumn of 2021, this created a windfall of about 1.29 billion euros. Some of this money directly found its way channeled to consumption, real estate and the stock market. At the same time, the people's consumption habits were impacted by the easing of restrictions. As a result, in 2021, people started spending considerably more money on eating out and on holiday travel. However, all these developments taking place at the same time started to push up inflation. In 2021, the consumer price index CPI increased by 4.7% compared to the previous year.

There have been minor changes in the division of industries compared to the previous year. COVID-19 restrictions and related fears affected the most the transport and logistics sector, which has been in decline for the third year in a row. The main driver of the decline is the fall in the share price of Tallink and Port of Tallinn, which account for more than 57% of the sector. The financial sector that which showed strong rise in value last year, has decreased by about 7% this year (with the exception of LHV and Bigbank, whose value increased due to high return on equity, ROE). The real estate sector, which accounts for 15% of the total value of TOP 101 companies, remained at the same level in terms of value. This year the value of Eesti Energia has been calculated without Enefit Green, which is listed separately due to being listed. The separation of Enefit Green also explains why there are major changes in the area of utilities and production of energy carriers.

This year the lowest value ranked among 101 most valuable companies was 84.36 million euros which is 2.2% less than a year earlier. There was also a significant decrease in the total value of the TOP 5 most valuable companies, which fell from 8.2 billion euros to 6.4 billion euros in a year. However, the total value of 101 most valuable companies increased by approximately 750 million euros, which suggests strong value growth of companies in the middle of ranking. In this year's ranking there are eight companies valued at more than one billion euros, as compared to six companies a year earlier.