In 1995 Amsterdam's new trading system successfully completed its first full year of operation. Twenty-three Dutch brokerage firms now continuously quote bid and offer prices for the limit order book funds in the Amsterdam Exchanges NV Trading System (ASSET). On average, the spread between the best buy and sell prices in ASSET is much sharper than in London's SEAQ-International system.
Actively traded shares
Approximately half the share turnover on the ASE is derived from the most active stocks in the retail segment, in this case the limit order book. This safeguards the quality of the official price in the central market, and ensures that it will be safeguarded in the future. The limit order book has produced sharper prices than ASSET.
Wholesale limit
The "depth of the market" of the various equities is measured in terms of the number of times the wholesale limit can be traded. On average about one wholesale limit can be traded at the BBO. At least three times the wholesale limit can be bought or sold if a price increase or decrease of only half a percent is accepted.
The system for wholesale trading between the Members, AIDA, has been used to a greater extent than was expected. In fact it has been used so much that the transaction charges for AIDA were halved at the beginning of 1995. On average, 1 1 % of the turnover in the limit order book is generated in AIDA, which is equivalent to over 1 00 transactions a day. Bourse fees per transaction were decreased generally in 1995.
Positive reactions
Institutional investors, and Dutch investors in particular, consider TSA to be an improvement. Many feel that the most important features are ASSET and the publication of the BBO from the limit order book since May 1995. These positive reactions have yet to be fully reflected in a clear increase in Amsterdam's share of the market in 1995 in Dutch equities. However, in the long term, Amsterdam's better prices are likely to result in an increase in its market share and liquidity. Moreover there are clear signs of increasing interest from overseas investors and brokers.
For further information on the Amsterdam Exchanges NV, please contact; Thom Hoedemakers, Director of Communications, Amsterdam Exchanges NV, Buersplein 5, 1012 JW Amsterdam, Netherlands, Tel: +31 20 523 4014, Fax: +31 20 523 4950, or enter text search 'Amsterdam Exchanges NV' and 'Business Monitor'.
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ARTICLE
23 February 1996