Record Turnover And All-Time Closing High In February

In February the market was heavily influenced by interest rates which led to considerable fluctuations in the index, even pushing it briefly below the 500-points barrier. Another major influence on trade was a string of full-year earnings figures from listed companies. In spite of a slight increase in interest rates and a concomitant fall in bond prices, the Amsterdam EOE index managed to end the month at a new record high of 513.22 points, almost ten points up on the 503.38 registered at end-January. While an initial batch of corporate earnings figures were somewhat disappointing, a number of companies showed good results later in the month.

Turnover levels
Turnover levels were again high in February. Total turnover amounted to172.2 billion guilders, compared with 187.2 billion guilders in January. In February 1995 turnover amounted to 103.2 billion guilders. Share turnover rose to 57.9 billion guilders from 54.9 billion guilders in January, a new monthly record. Bond turnover amounted to 113.7 billion guilders, compared with 132.3 billion guilders in January. In February 1995 share turnover amounted to 27.5 billion guilders, while bond turnover came out at75.9 billion guilders.

Rising interest rates
In contrast to January, capital market interest rates rose significantly in February. This was reflected in falling bond prices. The rise in interest rates reflected a number of different factors. The market feared German M3money supply figures would be unfavourable and discounted the likelihood of a further cut in U.S. interest rates by the Federal Reserve on the grounds that the U.S. economy did not require a move of this nature. Mortgage lender ABP was the first to hike its rate on five-year loans.

The bond market headed into slightly calmer waters during the last week of February. This was due to better-than-expected German money supply figures and Federal Reserve chairman Alan Greenspan's stated confidence in continued low U.S. inflation. Dutch economic growth figures also fell as Germany had a knock-on effect.

Share prices rise too
In spite of the slight rise in interest rates and the initially disappointing 1995 results reported by a number of listed companies, the Amsterdam EOE index set a string of new records. Its unpredictability throughout the month reflected the overall market sentiment as investors seesawed between hope and fear. There were days when the AEX lost six points and days when it posted similar gains. One such day was Monday February 19, when the AEX plunged close on six points on falling guilder bonds and a lower dollar. By the following Thursday, February 22, the Dutch market closed at 507.50, nearly five points higher than the day before and eight points up on the Monday. The driving force behind the gain was a buoyant Dow Jones Index which marched ahead 92 points, its third-highest rise ever, to set a new record.

Taken individually the annual results of some listed companies were not well-received by investors. The figures reported by Royal Dutch Petroleum and Unilever knocked their respective share prices back by several guilders and Polygram's figures, too, were seen as disappointing. The same was true of the 1995 earnings reported by chemicals concern Akzo. But the month ended on a high note with ABN AMRO's good 1995 earnings figures. The results posted by AEX newcomer Hagemeyer were also well-received by the market, as were those of Oce-van der Grinten, Philips, DSM and Van Ommeren. Randstad's record gains also contributed to the month-end upbeat sentiment.

Issues

Bonds

08/02/96   NV Bank Nederlandse Gemeenten 3% '96-01 US$200 million
08/02/96   Credit Local de France 5 3/4% '96-03 500 million guilders
08/02/96   Dutch state 6 1/4% 93-98 1.6 billion guilders
09/02/96   Dutch state 6 1/4% 93-98 1.8 billion guilders
12/02/96   Dutch state 6 1/4% 93-98 1.8 billion guilders
13/02/96   ING Bank NV 6 1/4% '96-06 500 million guilders 
15/02/96   ABN AMRO Bank NV 1% '95-97 2.5 billion Portuguese escudos 
15/02/96   Dresdner Finance BV 5 1/4% '96-02 300 million guilders
16/02/96   Rabobank Nederland 5 1/4% '96-01 500 million guilders
16/02/96   Rabobank Nederland 6 1/8% '96-06 500 million guilders
19/02/96   Deutsche Finance (Netherlands) BV 5 3/4% '96-03 350 
           million guilders
19/02/96   General Electric Capital Corporation 2 1/2% '96-00 200 
           million guilders
21/02/96   NV Bank Nederlandse Gemeenten 4 1/2% '96-99 300 million 
           German marks
22/02/96   Helaba International Finance PLC 5 7/8% '96-04 300 million 
           guilders
23/02/96   NV Bank Nederlandse Gemeenten 2 1/2% '96-02 150 million 
           Swiss francs
23/02/96   NV Bank Nederlandse Gemeenten 6% '96-02 2 billion 
           Luxembourg francs
23/02/96   Rabobank Nederland 4 1/4% '96-06 200 million guilders
27/06/96   De Nationale Investeringsbank NV 5% '96-01 200 million 
           gilders
28/02/96   Bayerische Vereinsbank AG 5 1/4% '96-02 300 million 
           guilders

For further information, please contact: Thom Hoedemakers, Director of Communications, Amsterdam Exchanges NV, Tel: +31 20 523 4014 or Paddy Manning, St James Corporate Communications, Tel: 0171-436 4101

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.