Initially prospects had appeared rather more gloomy with the index dropping below the 510 point level earlier in the month. The recovery in the final days meant that the loss from the all-time record high of 572.50 points set in early June amounted to just over six percent. The trend on the MidCap Index - which incidentally reached an all-time high in early July -broadly followed that of the AEX. Closing at 801.20, the MidCap showed a loss of 4.7 percent on June's close.
TURNOVER LEVELS
Total turnover in July amounted to 169,2 billion guilders (compared with 153 billion guilders in June and 89 billion guilders in July 1995). Share turnover rose to 47,5 billion guilders from 45 billion guilders in June and 37,9 billion guilders in July 1995. Bond turnover in July amounted to 121,7 billion guilders of which government bonds accounted for 112,4 billion guilders. Total bond turnover in July amounted to 108 billion guilders, while in July last year it amounted to 50,3 billion guilders.
THE INTERNATIONAL CONTEXT
For the most part prices on Amsterdam's Beursplein shadowed trends on the major foreign exchanges. New York and Japan also saw large, predominantly negative, price fluctuations. Sentiment in the US was largely determined by fears of accelerating economic growth and concomitantly higher interest rates.
The bearish mood was exacerbated by rumours that bourse gurus were expecting a market crash of 20 to 25 percent. As a result of these influences Wall Street experienced several days of jittery trade leading to sharp price falls. Towards the end of the month fears of an imminent rate hike waned and, more importantly, a number of companies -- particularly in the hi-tech sector -- posted higher than expected quarterly profit figures. Consequently New York made a reasonable recovery and July losses were limited to some two percent. In Japan the Nikkei index dropped 3,000 points over a relatively short period to end at 20,000.
The dollar dictated trade on the Amsterdam Exchanges NV throughout July. The US currency started the month at around 1.71 guilders, but lost ground through the month to trade below 1.65 guilders. There were no obvious explanations for the decline.
Share prices in Amsterdam
As usual, international issues were hardest hit by the falling dollar and the bearish sentiment on Wall Street. Consequently price falls in this sector outstripped the market average. Philips was the first international to publish second quarter figures. The electronics giant was plagued by poor market conditions and is radically restructuring its 'Sound and Vision' activities. The share price dropped sharply on the news, but bounced back shortly afterwards. Philips' Polygram subsidiary reported stable profits. Supermarkets giant Ahold was badly hit by the price downtrend early in the month. The company made a major issue to help finance its takeover of U.S. grocery store chain Stop & Shop. Due to the fall in share prices the issue was priced at 85 guilders per share, compared with a share price high of more than 97 guilders in June. DSM and KNP BT, both seen as cyclical stocks, published hefty second-quarter profit falls, but these had little impact on their respective share prices.
Among the MidCap stocks, Oce-van der Grinten published substantially higher half-year profits, as a result of which the share price climbed sharply. The same was true of Stork, which concluded its takeover of the financially viable parts of bankrupt aircraft maker Fokker.
On the national market there were also various companies posting half-year results but for the most part this had little influence on prices. The share price of hoekman and marketmaker firms Van der Moolen and AOT remained as good as unchanged, despite the fact that the two posted a sharp increase in profits due to the rise in bourse turnover.
Baan Company reported profits doubled, but investors had apparently been expecting an even greater rise as the stock's price fell sharply. Goudsmit was rewarded with significant share price gains for its announcement it planned to divest loss-making clothes chain Society Shop. Goudsmit plans to concentrate on temporary employment activities, and this was well-received by investors.
Bonds
The bond market stayed relatively quiet during July. Overall bond prices moved within a relatively narrow range, with the average effective return on government bonds hovering around the six percent level.
NEW ISSUES
Shares in July
09/07/96 Oce van der Grinten N.V., call-warrants,
fl. 68.415.648
16/07/96 Koninklijke Ahold N.V., emissie,
fl. 3.060.000.000
24/07/96 Pacific Rim Convertible Fund N.V., introductie
door emissie, fl. 55.000.000
Bonds in July
05/07/96 Dresdner Finance B.V., 5 1/2%'96-02,
f 300.000.000
05/07/96 DSL Finance N.V., 5 1/8%'96-00, f 250.000.000
08/07/96 ABN AMRO Bank N.V., Chicago Branch, 7,55%'96-06,
US.$ 750.000.000
12/07/96 Bayerische Hypotheken- und Wechsel-Bank
Aktiengesellschaft, 4 3 /4%'96-99, f 200.000.000
15/07/96 Koninklijke PTT Nederland N.V., 6 1/2%'96-06,
f 1.300.000.000
16/07/96 National Australia Bank Limited, 8 1/2%'96-99,
Aus.$ 125.000.000
16/07/96 Zweden, 8 5/8%'96-01, Aus.$ 100.000.000
18/07/96 Cooperatieve Centrale Raiffeisen-Boerenleenbank
B.A., 7%'96-98, £ 100.000.000
18/07/96 Rabo Australia Limited, 8 1/4%'96-99,
Aus.$ 100.000.000
19/07/96 Bayerische Landesbank Girozentrale, 4 3/4%'96-00,
f 300.000.000
26/07/96 F.I. Mortgage Securities B.V., 6 3/4%'96-06,
f 500.000.000
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.
For further information, please contact:
Thom Hoedemakers
Director of Communications
Amsterdam Exchanges NV
Tel: +31 20 523 4014
Paddy Manning
St James Corporate Communications
Tel: 0171-436 4101