LARGE VOLUME OF NEW ISSUES AND HIGHER PRICES IN 1995
Last year on the Amsterdam Exchanges NV was characterized by an explosive growth in turnover volumes together with spiralling share prices. The volume of issues and the number of stock market introductions in 1995 was also highly satisfactory. The price rises were mainly due to the falling trend in interest rates and the firm dollar, the favourable economic climate and good corporate earnings figures. The sharply higher turnover volume reflected international developments such as economies of scale, continuing globalization of securities trading and rising share and bond prices as well as other factors. The marked increase in the number of transactions compared with the previous year could point to the return of the private investor. The increased volume of issues and the large number of stock exchange flotations reflected the favourable economic climate. The Amsterdam EOE index rose by 17 percent in 1995 to 485.35 points from 414.47 (+17%). The all time high of 486.82 was achieved during that last exchange trading day, 28 December.
Turnover levels hit record highs
Total turnover on the Amsterdam Exchanges NV rose further in 1995, as did both share and bond turnover levels. In the first half of the year, turnover levels more or less tracked those of 1994, but a hugely successful second half resulted in the achievement of a full-year all-time annual record high.
Total turnover for the year amounted to 1,36.3 trillion guilders, an increase of 16 percent year on year. Share turnover over 1995 rose to F400 billion from F312 billion in 1994, while bond turnover amounted to F962 billion, compared with F848 billion in 1994.
In October cumulative share turnover topped that of full-year 1994, rising to 313 billion guilders on October 25 compared with the previous year's total of F312 billion. Earlier in the month, on October 4, total turnover had already broken through the 1,000 billion guilder barrier. The steady turnover uptrend may partly be ascribed to increased professional activity, rising share and bond prices (up to and including September) and the downward trend in interest rates.
The monthly turnover record was booked in November, when 42.0 billion guilders' worth of shares changed hands. The daily turnover record was set on October 25, 1995: 4.65 billion guilders. October 23 saw a record number of transactions for a single day. These amounted to no less than 25,222.
Turnover trends better than elsewhere
According to the federation of EU stock exchanges, share turnover on the Amsterdam Exchanges NV grew by 30 percent year-on-year (calculated in ECUs) over the first 11 months of 1995. Over the same period, the German bourse declined by some 13 percent. Share turnover levels also declined on the Lisbon (-/-2%), Madrid (-/-11%) and Italian (-/-41%) exchanges.
Amsterdam also scored relatively well in terms of bond turnover. The federation of EU stock exchanges reported bond turnover on the Amsterdam Exchanges NV grew 17 percent over the first seven months of 1995, compared with a decline of almost six percent on the London Stock Exchange.
On price performance the ASE also performed well. New York headed the league with a rise of 33%, followed by Zurich with 25,5%, Hong Kong (22%), London (+20%), Amsterdam (+17%), Sydney (+15%), Brussels (+12%) and Frankfurt (+8%).
Good year for bourse flotations
As well as being a good year for investors, 1995 was also a good year for the introductions of new companies. The introduction of retail and services group Vendex International on June 1 was the biggest of the new issues. Other companies floated on the stock exchange included ASM Lithography (16-3), Baan Company (23-5), Axxicon Group (18-9), Heidemij (2-10), Gucci (24-10), Computer Management Group (1-12) and BE Semiconductors Industries (5-12).
The trends in the newcomers' share prices were as follows:
ASM Lithography: F28.00 to F55.50 (with a high of F90.50 in July) +98.2%
Baan Company: F25.80 to F70.50 (with a high of F86.50 in September)
+ 173.3%
Vendex: F39.00 to F47.70 (with a high of F49.60 in September)
+ 22.3%
Axxicon: F19.00 to F29.50 (with a high of F32.80 on September 18) + 55.3%
Heidemij: F15.00 to F14.80 (with a high of F15.20 on October 2)
- 1.3%
Gucci: F40.00 to F55.00 (with a high of F63.60 in November)
+ 77.9%
CMG: F07.16 to F08.40 (with a highest price of F09.00 on the first day of
trading) + 17.1%
BESI: F20.94 to F21.00 (with a high of F26.50 on the first day of trading),
+ 0.3%
Stock exchange introductions and issues in 1995 (through December 22)
The volume of new issues (= total of new paper admitted to listing) on the share market in 1995 amounted to 23.6 billion guilders, a marked decline compared with the record 57.0 billion guilders registered in 1994 (which included Koninklijke PTT Nederland, the biggest- ever ASE launch).
Due to the uptrend in share prices, the bourse capitalization of domestic stocks amounted to some 571 billion guilders at end 1995 compared with 491 billion guilders a year earlier. In 1995 30 new issuing institutions (1994:21) were admitted to listing. As in previous years, investment funds accounted for the lion's share (19) of share introductions. The volume of new issues on the bond market rose to 91.4 billion guilders from 67.3 billion. Government bond issues accounted for 51.4 billion guilders (1994:36.1 billion guilders). The volume of Eurobond issues rose to 31.9 billion guilders from 24.7 billion, with domestic issuers accounting for 20.5 billion guilders (1994:16.2 billion) of the total. The issue of mortgage-, bank and savings bonds rose to 7.8 billion guilders from 3.7 billion.
Government bonds
The following government bonds were issued by the finance ministry in full or in part
(reopened) during 1995:
Name Yield Amount
7.25% 1994-04 7.67 F 8.5 billion
7.75% 1995-05 7.67 F12.5 billion
6.50% 1995-03 7.39 F 1.2 billion
7.50% 1995-10 7.62 F 7.5 billion
6.50% 1993-03 6.92 F 1.2 billion
7.00% 1995-05 6.99 F 8.75billion
6.50% 1995-03 6.75 F 0.9 billion
7.00% 1995-05 6.55% F 2.1 billion
6.75% 1995-05 6.71% F10.0 billion
Total F52.65 billion
Interest rates
Both long and short term interest rates went into free fall during 1995. The Dutch central bank's secured loans rate (rate on advances) halved to 2.75 percent, its lowest level in 59 years. The yield on the five longest-running government bonds fell from 7.68 to 6.15 percent, the same level as in early 1994.
Price trends over 1995
Measured in terms of the Amsterdam EOE index of leading issues, share prices rose 16 percent over the year, while according to the broader-based CBS All Share Index they rose 14 percent. The new Amsterdam AMX index of medium-capitalized firms introduced on October 4 rose by 13.4 percent. Remarkably, the Top 5 index lagged behind with a yield of 9.4 percent. The Amsterdam Exchanges NV outperformed the EuroTop 100 Index, which registered a yield of 11.7 percent over the year.
AEX close 1994 414.47
Low March 23 388.33
End-1995 485.35
Like most other European exchanges, the Amsterdam EOE index fell in the first quarter due to the lower dollar. The dollar hit an intra-day low of 1.52 guilders on March 8, its lowest point since the Second World War. US stock exchanges however surged ahead, with the Dow Jones index crashing through the 4,000 points barrier on February 23. After March 23 the AEX embarked on a long and steady climb through to mid-September. On July 6 it topped its previous record high of 438.71 points set on January 31, 1994 before finally hitting an intraday all-time high of 476.86 on September 20. The principal reasons behind the climb were falling interest rates and the recovering dollar. From mid-September the AEX started to fall, depressed by a renewed slide in the dollar and a slight upturn in capital market interest rates. A 30 percent plunge in the share price of index heavyweight Philips contributed markedly to the decline. The index bottomed out on October 23, when the dollar hit its lowest point of 1.55 guilders. From the end of October onwards the AEX sprinted ahead to set a new string of records. Buoyed by a rallying dollar and falling interest rates it hit a fresh high of 481.98 on December 6. The Dow Jones battered through the 5,000 points barrier on November 21. With its 34.1 percent rise over the year, the New York Stock Exchange was the clear leader among the major international bourses.
Philips a favourite
Philips was an undisputed favourite among investors in 1995. The hefty swings in Philips' share price led to huge turnovers in the stock. As a result Philips -- thanks partly to an extremely busy third quarter -- last year toppled Royal Dutch Petroleum from its customary position at the head of the turnover rankings.
High tech sector leads the field
The majority of leading issues booked a rise in share prices over 1995. This was due in the main to the favourable international climate for share investments and the sustained pressure on interest rates which facilitated a switch into shares. Many stocks also benefited from the rise in the dollar, while favourable economic growth also obviously played a significant role. The same was true of a number of MidCap stocks, which also booked good growth over the period. Gauged in terms of sector, financials did particularly well. Insurer AEGON led the field with a 60 percent increase in its share price, but Fortis Amev was also an attractive performer with an increase of 46 percent. The business services sector also posted good overall growth. Stocks such as Randstad (+55 percent), Oce-Van der Grinten (+25 percent) and Content (+51 percent) all appeared to reap optimum benefits from the expanding economy.
Top performers in the retail sector were Bijenkorf Beheer (+15 percent) and De Boer Winkelbedrijven (15 percent).
The high-tech sector generally performed well, with share price rises in excess of 70 percent:
Management Share (+196 percent), Multihouse (+85 percent), Simac (+77 percent), Ordina
Beheer (+30 percent) and Neways (+56 percent).
The year in review
The traditionally upbeat New Year speeches from listed companies did little to inspire the market to resume its upward trend in January. Despite heavy turnover levels, the share market only moved over a broad front once or twice. The trend then was mainly downwards, as shares were depressed by the Mexican peso's free fall (dollar under pressure), the earthquake in Kobe, Japan, and prospects of a possible interest rate hike by the US Federal Reserve. The Amsterdam EOE-index fell 6.36 points to 408.11 (-/-1.5%).
As in January, local issues were the most in demand on the Amsterdam Exchanges NV in February. The CBS sub-index for these companies rose by almost one percent., But despite the firm sentiment early in the month and favourable corporate earnings figures, the bourse as a whole showed a slight decline. The Amsterdam EOE index slipped fractionally on high levels of turnover (-/-0.01%). This was primarily due to the US dollar which remained under pressure (-/- a hefty 4%).
March went out like a lion. But the price rally towards the end of the month prompted by German, Dutch and other interest rate cuts (varying from -/-0.5% to 4%) proved all too brief. The two percent gain was wiped out just a day later. Rate support was unable to turn the tide. The Amsterdam EOE index ended the month at 393.4 from ???? at end-February. This contrasted with a value of 414.47 at end-1994. Quarterly turnover levels continued to rise -- particularly when compared to the final 1994 quarter (334.3 billion guilders compared with 230.1 billion).
In April the market was flying high on a strong tail wind. The Amsterdam EOE index ended the month well above 400 points at 416.89, compared with just 393.40 points a month earlier. This amounted to a rise of seven percent. The upbeat sentiment reflected the dollar's rally towards the month end, surprisingly good first-quarter figures from several internationally traded stocks, and a fall in long-term guilder rates.
The firming dollar (+3%) and falling capital market interest rates (0.4 percentage points to 6.36 percent) in May fostered an upbeat sentiment on the bond market. As a result shares were also much in demand. The CBS price index for bonds climbed to a high of 113.8 points, while the Amsterdam EOE index rose 3.5 percent to 431.52 points, taking it above 420 points for the first time since August 1994. Turnover levels were relatively high.
Sentiment in June was relatively calm, with little happening on balance. Activity declined due to the end of the annual report season and a start to the summer holidays. The signals with regard to economic developments emanating from abroad were mixed and the dollar failed to give any real impetus. The Amsterdam EOE index edged up to 432.38 points at end-June from 431.52 in May.
In July the market managed to sustain the share price rally begun earlier. This resulted in various new records being set for both the Amsterdam EOE and the CBS All Share indices. The upbeat sentiment was underpinned by increased confidence in the economy, favourable expectations with regard to first-half corporate earnings figures, the continued low level of capital market interest rates and, last but not least, the surge in Philips' share price. The bond market also firmed. Traders reported a slight but discernible switch into long paper, which indicated increased confidence in future interest rate trends. Sentiment was also bullish on many surrounding exchanges, but the Amsterdam EOE index (up six percent from 432.38 to 458.13 points) led the field alongside Frankfurt's DAX 30.
Price trends were extremely changeable in August. While the Amsterdam EOE index booked a number of new records during the month, it was unable to maintain the confident uptrend of July. On the one hand market sentiment was boosted by the long-expected cuts in official interest rates and the firming dollar. But this was offset by the fact that expectations for many companies' first-half figures proved too optimistic and a dip in the US bourse barometer, the Dow Jones index. The Amsterdam EOE index ended the month virtually unchanged at 458.26 (end-July 458.13). On the bond market, foreign demand declined and yields fell.
Prices on the Amsterdam Exchanges NV fluctuated strongly in September. The first half of the month was characterized by rising prices, but this was followed by a correction later in the month. Nevertheless the Amsterdam EOE index picked up 1.5 percent over full September to 466.26 (end-August 458.26).
October was a busy month; some days saw unprecedented turnover levels and newcomers such as environmental stock Heidemij and fashion goods maker Gucci were much in demand. The second tranche of Koninklijke PTT Nederland (KPN) shares also stirred great (private) investor interest. An amount of 3.7 billion guilders in new stocks was admitted to listing in October, while subscriptions to new issues (including the second KPN tranche) amounted to 7.3 billion guilders. The decline in the Amsterdam EOE index, from 466.26 points to 453.56 (-/- 3%) mainly reflected the weaker dollar, the absence of positive interest rate impulses and a fall in the price of shares in index heavyweight Philips. The end of the month saw a slight turnaround.
In addition to turnover records, a number of new index records were set in November. The two main reasons for the upbeat sentiment on the Amsterdam Exchanges NV in November were the rising dollar (up two percent) and the downtrend in interest rates. In addition the sentiment on other exchanges -- particularly Wall Street -- played a role. As a result the Amsterdam EOE index was able to climb to a new record high of 478.11 points, a rise of no less than 25 points (up 5.5 percent) on October. November was also a good month for turnover, as the share turnover record set the previous month was broken. The volume of new issues amounted to some 2.5 billion guilders, of which most were (convertible) bonds.
In December the index hovered around November's level. Turnover mushroomed to some 1.35 trillion guilders and the stock exchange welcomed two newcomers: BESI and CMG. The cut in the secured loans rate to 2.75 percent failed to engender any real euphoria.
For further information on the Amsterdam Exchanges NV, please contact: Thom Hoedemakers, Director of Communications, Amsterdam Exchanges NV, Beursplein 5, 1012 JW Amsterdam, Netherlands, Tel: + 31 20 5234014, Fax: + 31 20 5234950, or enter a text search "Amsterdam Exchanges NV" and "Business Monitor".
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Last year on the Amsterdam Exchanges NV was characterized by an explosive growth in turnover volumes together with spiralling share prices. The volume of issues and the number of stock market introductions in 1995 was also highly satisfactory. The price rises were mainly due to the falling trend in interest rates and the firm dollar, the favourable economic climate and good corporate earnings figures. The sharply higher turnover volume reflected international developments such as economies of scale, continuing globalization of securities trading and rising share and bond prices as well as other factors. The marked increase in the number of transactions compared with the previous year could point to the return of the private investor. The increased volume of issues and the large number of stock exchange flotations reflected the favourable economic climate. The Amsterdam EOE index rose by 17 percent in 1995 to 485.35 points from 414.47 (+17%). The all time high of 486.82 was achieved during that last exchange trading day, 28 December.
Turnover levels hit record highs
Total turnover on the Amsterdam Exchanges NV rose further in 1995, as did both share and bond turnover levels. In the first half of the year, turnover levels more or less tracked those of 1994, but a hugely successful second half resulted in the achievement of a full-year all-time annual record high.
Total turnover for the year amounted to 1,36.3 trillion guilders, an increase of 16 percent year on year. Share turnover over 1995 rose to F400 billion from F312 billion in 1994, while bond turnover amounted to F962 billion, compared with F848 billion in 1994.
In October cumulative share turnover topped that of full-year 1994, rising to 313 billion guilders on October 25 compared with the previous year's total of F312 billion. Earlier in the month, on October 4, total turnover had already broken through the 1,000 billion guilder barrier. The steady turnover uptrend may partly be ascribed to increased professional activity, rising share and bond prices (up to and including September) and the downward trend in interest rates.
The monthly turnover record was booked in November, when 42.0 billion guilders' worth of shares changed hands. The daily turnover record was set on October 25, 1995: 4.65 billion guilders. October 23 saw a record number of transactions for a single day. These amounted to no less than 25,222.
Turnover trends better than elsewhere
According to the federation of EU stock exchanges, share turnover on the Amsterdam Exchanges NV grew by 30 percent year-on-year (calculated in ECUs) over the first 11 months of 1995. Over the same period, the German bourse declined by some 13 percent. Share turnover levels also declined on the Lisbon (-/-2%), Madrid (-/-11%) and Italian (-/-41%) exchanges.
Amsterdam also scored relatively well in terms of bond turnover. The federation of EU stock exchanges reported bond turnover on the Amsterdam Exchanges NV grew 17 percent over the first seven months of 1995, compared with a decline of almost six percent on the London Stock Exchange.
On price performance the ASE also performed well. New York headed the league with a rise of 33%, followed by Zurich with 25,5%, Hong Kong (22%), London (+20%), Amsterdam (+17%), Sydney (+15%), Brussels (+12%) and Frankfurt (+8%).
Good year for bourse flotations
As well as being a good year for investors, 1995 was also a good year for the introductions of new companies. The introduction of retail and services group Vendex International on June 1 was the biggest of the new issues. Other companies floated on the stock exchange included ASM Lithography (16-3), Baan Company (23-5), Axxicon Group (18-9), Heidemij (2-10), Gucci (24-10), Computer Management Group (1-12) and BE Semiconductors Industries (5-12).
The trends in the newcomers' share prices were as follows:
ASM Lithography: F28.00 to F55.50 (with a high of F90.50 in July) +98.2%
Baan Company: F25.80 to F70.50 (with a high of F86.50 in September)
+ 173.3%
Vendex: F39.00 to F47.70 (with a high of F49.60 in September)
+ 22.3%
Axxicon: F19.00 to F29.50 (with a high of F32.80 on September 18) + 55.3%
Heidemij: F15.00 to F14.80 (with a high of F15.20 on October 2)
- 1.3%
Gucci: F40.00 to F55.00 (with a high of F63.60 in November)
+ 77.9%
CMG: F07.16 to F08.40 (with a highest price of F09.00 on the first day of
trading) + 17.1%
BESI: F20.94 to F21.00 (with a high of F26.50 on the first day of trading),
+ 0.3%
Stock exchange introductions and issues in 1995 (through December 22)
The volume of new issues (= total of new paper admitted to listing) on the share market in 1995 amounted to 23.6 billion guilders, a marked decline compared with the record 57.0 billion guilders registered in 1994 (which included Koninklijke PTT Nederland, the biggest- ever ASE launch).
Due to the uptrend in share prices, the bourse capitalization of domestic stocks amounted to some 571 billion guilders at end 1995 compared with 491 billion guilders a year earlier. In 1995 30 new issuing institutions (1994:21) were admitted to listing. As in previous years, investment funds accounted for the lion's share (19) of share introductions. The volume of new issues on the bond market rose to 91.4 billion guilders from 67.3 billion. Government bond issues accounted for 51.4 billion guilders (1994:36.1 billion guilders). The volume of Eurobond issues rose to 31.9 billion guilders from 24.7 billion, with domestic issuers accounting for 20.5 billion guilders (1994:16.2 billion) of the total. The issue of mortgage-, bank and savings bonds rose to 7.8 billion guilders from 3.7 billion.
Government bonds
The following government bonds were issued by the finance ministry in full or in part
(reopened) during 1995:
Name Yield Amount
7.25% 1994-04 7.67 F 8.5 billion
7.75% 1995-05 7.67 F12.5 billion
6.50% 1995-03 7.39 F 1.2 billion
7.50% 1995-10 7.62 F 7.5 billion
6.50% 1993-03 6.92 F 1.2 billion
7.00% 1995-05 6.99 F 8.75billion
6.50% 1995-03 6.75 F 0.9 billion
7.00% 1995-05 6.55% F 2.1 billion
6.75% 1995-05 6.71% F10.0 billion
Total F52.65 billion
Interest rates
Both long and short term interest rates went into free fall during 1995. The Dutch central bank's secured loans rate (rate on advances) halved to 2.75 percent, its lowest level in 59 years. The yield on the five longest-running government bonds fell from 7.68 to 6.15 percent, the same level as in early 1994.
Price trends over 1995
Measured in terms of the Amsterdam EOE index of leading issues, share prices rose 16 percent over the year, while according to the broader-based CBS All Share Index they rose 14 percent. The new Amsterdam AMX index of medium-capitalized firms introduced on October 4 rose by 13.4 percent. Remarkably, the Top 5 index lagged behind with a yield of 9.4 percent. The Amsterdam Exchanges NV outperformed the EuroTop 100 Index, which registered a yield of 11.7 percent over the year.
AEX close 1994 414.47
Low March 23 388.33
End-1995 485.35
Like most other European exchanges, the Amsterdam EOE index fell in the first quarter due to the lower dollar. The dollar hit an intra-day low of 1.52 guilders on March 8, its lowest point since the Second World War. US stock exchanges however surged ahead, with the Dow Jones index crashing through the 4,000 points barrier on February 23. After March 23 the AEX embarked on a long and steady climb through to mid-September. On July 6 it topped its previous record high of 438.71 points set on January 31, 1994 before finally hitting an intraday all-time high of 476.86 on September 20. The principal reasons behind the climb were falling interest rates and the recovering dollar. From mid-September the AEX started to fall, depressed by a renewed slide in the dollar and a slight upturn in capital market interest rates. A 30 percent plunge in the share price of index heavyweight Philips contributed markedly to the decline. The index bottomed out on October 23, when the dollar hit its lowest point of 1.55 guilders. From the end of October onwards the AEX sprinted ahead to set a new string of records. Buoyed by a rallying dollar and falling interest rates it hit a fresh high of 481.98 on December 6. The Dow Jones battered through the 5,000 points barrier on November 21. With its 34.1 percent rise over the year, the New York Stock Exchange was the clear leader among the major international bourses.
Philips a favourite
Philips was an undisputed favourite among investors in 1995. The hefty swings in Philips' share price led to huge turnovers in the stock. As a result Philips -- thanks partly to an extremely busy third quarter -- last year toppled Royal Dutch Petroleum from its customary position at the head of the turnover rankings.
High tech sector leads the field
The majority of leading issues booked a rise in share prices over 1995. This was due in the main to the favourable international climate for share investments and the sustained pressure on interest rates which facilitated a switch into shares. Many stocks also benefited from the rise in the dollar, while favourable economic growth also obviously played a significant role. The same was true of a number of MidCap stocks, which also booked good growth over the period. Gauged in terms of sector, financials did particularly well. Insurer AEGON led the field with a 60 percent increase in its share price, but Fortis Amev was also an attractive performer with an increase of 46 percent. The business services sector also posted good overall growth. Stocks such as Randstad (+55 percent), Oce-Van der Grinten (+25 percent) and Content (+51 percent) all appeared to reap optimum benefits from the expanding economy.
Top performers in the retail sector were Bijenkorf Beheer (+15 percent) and De Boer Winkelbedrijven (15 percent).
The high-tech sector generally performed well, with share price rises in excess of 70 percent:
Management Share (+196 percent), Multihouse (+85 percent), Simac (+77 percent), Ordina
Beheer (+30 percent) and Neways (+56 percent).
The year in review
The traditionally upbeat New Year speeches from listed companies did little to inspire the market to resume its upward trend in January. Despite heavy turnover levels, the share market only moved over a broad front once or twice. The trend then was mainly downwards, as shares were depressed by the Mexican peso's free fall (dollar under pressure), the earthquake in Kobe, Japan, and prospects of a possible interest rate hike by the US Federal Reserve. The Amsterdam EOE-index fell 6.36 points to 408.11 (-/-1.5%).
As in January, local issues were the most in demand on the Amsterdam Exchanges NV in February. The CBS sub-index for these companies rose by almost one percent., But despite the firm sentiment early in the month and favourable corporate earnings figures, the bourse as a whole showed a slight decline. The Amsterdam EOE index slipped fractionally on high levels of turnover (-/-0.01%). This was primarily due to the US dollar which remained under pressure (-/- a hefty 4%).
March went out like a lion. But the price rally towards the end of the month prompted by German, Dutch and other interest rate cuts (varying from -/-0.5% to 4%) proved all too brief. The two percent gain was wiped out just a day later. Rate support was unable to turn the tide. The Amsterdam EOE index ended the month at 393.4 from ???? at end-February. This contrasted with a value of 414.47 at end-1994. Quarterly turnover levels continued to rise -- particularly when compared to the final 1994 quarter (334.3 billion guilders compared with 230.1 billion).
In April the market was flying high on a strong tail wind. The Amsterdam EOE index ended the month well above 400 points at 416.89, compared with just 393.40 points a month earlier. This amounted to a rise of seven percent. The upbeat sentiment reflected the dollar's rally towards the month end, surprisingly good first-quarter figures from several internationally traded stocks, and a fall in long-term guilder rates.
The firming dollar (+3%) and falling capital market interest rates (0.4 percentage points to 6.36 percent) in May fostered an upbeat sentiment on the bond market. As a result shares were also much in demand. The CBS price index for bonds climbed to a high of 113.8 points, while the Amsterdam EOE index rose 3.5 percent to 431.52 points, taking it above 420 points for the first time since August 1994. Turnover levels were relatively high.
Sentiment in June was relatively calm, with little happening on balance. Activity declined due to the end of the annual report season and a start to the summer holidays. The signals with regard to economic developments emanating from abroad were mixed and the dollar failed to give any real impetus. The Amsterdam EOE index edged up to 432.38 points at end-June from 431.52 in May.
In July the market managed to sustain the share price rally begun earlier. This resulted in various new records being set for both the Amsterdam EOE and the CBS All Share indices. The upbeat sentiment was underpinned by increased confidence in the economy, favourable expectations with regard to first-half corporate earnings figures, the continued low level of capital market interest rates and, last but not least, the surge in Philips' share price. The bond market also firmed. Traders reported a slight but discernible switch into long paper, which indicated increased confidence in future interest rate trends. Sentiment was also bullish on many surrounding exchanges, but the Amsterdam EOE index (up six percent from 432.38 to 458.13 points) led the field alongside Frankfurt's DAX 30.
Price trends were extremely changeable in August. While the Amsterdam EOE index booked a number of new records during the month, it was unable to maintain the confident uptrend of July. On the one hand market sentiment was boosted by the long-expected cuts in official interest rates and the firming dollar. But this was offset by the fact that expectations for many companies' first-half figures proved too optimistic and a dip in the US bourse barometer, the Dow Jones index. The Amsterdam EOE index ended the month virtually unchanged at 458.26 (end-July 458.13). On the bond market, foreign demand declined and yields fell.
Prices on the Amsterdam Exchanges NV fluctuated strongly in September. The first half of the month was characterized by rising prices, but this was followed by a correction later in the month. Nevertheless the Amsterdam EOE index picked up 1.5 percent over full September to 466.26 (end-August 458.26).
October was a busy month; some days saw unprecedented turnover levels and newcomers such as environmental stock Heidemij and fashion goods maker Gucci were much in demand. The second tranche of Koninklijke PTT Nederland (KPN) shares also stirred great (private) investor interest. An amount of 3.7 billion guilders in new stocks was admitted to listing in October, while subscriptions to new issues (including the second KPN tranche) amounted to 7.3 billion guilders. The decline in the Amsterdam EOE index, from 466.26 points to 453.56 (-/- 3%) mainly reflected the weaker dollar, the absence of positive interest rate impulses and a fall in the price of shares in index heavyweight Philips. The end of the month saw a slight turnaround.
In addition to turnover records, a number of new index records were set in November. The two main reasons for the upbeat sentiment on the Amsterdam Exchanges NV in November were the rising dollar (up two percent) and the downtrend in interest rates. In addition the sentiment on other exchanges -- particularly Wall Street -- played a role. As a result the Amsterdam EOE index was able to climb to a new record high of 478.11 points, a rise of no less than 25 points (up 5.5 percent) on October. November was also a good month for turnover, as the share turnover record set the previous month was broken. The volume of new issues amounted to some 2.5 billion guilders, of which most were (convertible) bonds.
In December the index hovered around November's level. Turnover mushroomed to some 1.35 trillion guilders and the stock exchange welcomed two newcomers: BESI and CMG. The cut in the secured loans rate to 2.75 percent failed to engender any real euphoria.
For further information on the Amsterdam Exchanges NV, please contact: Thom Hoedemakers, Director of Communications, Amsterdam Exchanges NV, Beursplein 5, 1012 JW Amsterdam, Netherlands, Tel: + 31 20 5234014, Fax: + 31 20 5234950, or enter a text search "Amsterdam Exchanges NV" and "Business Monitor".
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
