A year of breakthrough was how the Chairman of the Stock Exchange Association, Baron Boudewijn van lttersum, summed up 1995 in his New Year speech. He saw the year as characterised by record breaking levels of turnover, especially in equities, and the planned fundamental restructuring of the Stock Exchange organisation and capital markets.
High expectations met
On the bond market, Baron van lttersum highlighted the record turnover level of 1,362 billion guilders, up 17% from last year. After just over one year in operation Trading System Amsterdam, said the Chairman, more than met the high expectations of market players and the resulting attractive spreads and enhanced transparency have drawn more international trade to the Amsterdam bourse.
There was a record turnover in shares. But the Chairman pointed out that given that some three quarters of Dutch capitalisation and turnover was generated by the ten biggest stocks, the ASE was still too dependent on its leading companies.
He also reported that thanks to exceptional financial results, Stock Exchange members were refunded 14 million guilders - almost twice as much as last year.
Turning his thoughts to expectations for the coming year, the Chairman said that the ability of foreign investment houses to take up membership of the Stock Exchange in 1996 ranked high on Amsterdam's list of priorities. They would help boost the liquidity of Dutch stocks in the home market.
The Chairman saw the creation of a new bourse structure as "the most important task facing the Council of the Stock Exchange Association this year. The new structure would be based on "the common interest of the private sector as consumers of capital, the brokers as intermediaries and the investors as capital providers in the healthy functioning of our capital market". He felt this would help eliminate the differences of opinion that had arisen over corporate governance and antitakeover measures.
Successful launches
On the home front, the Chairman said that the climate for the flotation of family-owned firms on the Stock Exchange has improved as a result of the successful launches of 1995. "The Stock Exchange is eager to offer a helping hand to companies eligible for listing" he added.
The Stock Exchange Chairman also noted that the added value that smaller intermediary houses bring to specialist market sectors is under pressure from "growing client independence and sophistication".
New communication and calculation techniques, he said, would strengthen the investor's inclination to cut out the middle man and provide the Exchange with an opportunity to step in. "By actively exploiting these new technological possibilities, the bourse can support both the intermediaries and its clients in their services to the corporate sector and investors," he commented.
He argued that to maintain its position as a medium to large securities market in Europe, it is imperative that Amsterdam "takes an integrated approach to trade and settlement and to cash and derivatives markets".
As a consequence, he welcomed the breakthrough in relations with the European Options Exchange which has opened the way for "close consultations... on the formation of a joint structure".
Reviewing the Stock Exchange's excellent record on self-regulation, the Baron said that this year it would be drawing up rules on external supervision with the Netherlands Securities Board (STE).
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ARTICLE
23 February 1996