During the course of the month the dollar firmed to more than 1.73 guilders, its highest level in over a year. The Dutch central bank De Nederlandsche Bank cut official rates independently of the Bundesbank, a move made possible by the strength of the guilder on the international currency market. Bond prices stabilized.
Initially the signs pointed to an economic slowdown (particularly in Germany) but towards the end of the month it transpired that the decline in Dutch economic growth since 1994 had reversed. In the first 1996 quarter economic growth picked up to 1.8 percent from 1.6 percent in the final 1995 quarter.
Turnover levels
Total turnover in May amounted to 177 billion guilders (compared with 159.9 billion guilders in April and 126 billion guilders in May 1995). Share turnover rose to 56 billion guilders from 52.2 billion guilders in April and 33 billion guilders in May 1995. Bond turnover in May amounted to 120.3 billion guilders of which government bonds accounted for 109.6 billion guilders. Total bond turnover in April amounted to 107.8 billion guilders, while in May last year it amounted to 92.5 billion guilders.
Index scaled new record heights
Early in the month the AEX index of leading shares recorded a string of new records, to be followed by a modest correction. The upward climb was resumed towards the end of the month, partly thanks to the new records booked by America's Dow Jones index. The AEX index ended the month at 570.09 points, its highest-ever level and a 2.8 percent rise on its end-April level.
However the gains were not reflected across the board, with roughly equal numbers of gainers and losers. Amsterdam's largest listed company, Royal Dutch Petroleum surged ahead. The gains mainly reflected highly favourable first-quarter figures but were also due in part to increasing speculation of an imminent stock split in view of the shares' price gain to well over 250 guilders. Financials also increased in value, due primarily to the excellent first quarter profit figures posted by banking and insurance groups ING and Fortis. Brewer Heineken continued its upward climb, as a result of which its share price is fast approaching the 400 guilder mark. Supermarket chain Ahold was still basking in investor favour following its March announcement of the takeover of U.S. store chain Stop & Shop. The biggest loser was foods and beverages group BolsWessanen, after it disappointed investors anew with a downgraded profit forecast. Foods group CSM also lost a lot of ground despite the fact that the courts upheld its case in the dispute with the Amsterdam Exchanges NV over anti-takeover constructions. Worth noting too was the fall in KPN's share price: the stock has been pressured for some time, due in part to the approaching privatisation of telecommunications companies in Germany and France.
The MidKap index of medium capitalized firms outperformed the AEX index in May, as it had previously this year. The AMX advanced eight percent to a new record high of 808.68 in May, bringing its total gains this year to 40.7 percent compared with a rise of 17.5 percent in the AEX index. Several individual stocks rose strongly, while few showed significant share price losses. Remarkably the share prices of retail stocks Vendex, KBB and Macintosh all picked up despite negative reports on retail spending. Computer services firms Cap Volmac and Getronics also both booked major share price gains, boosted by the bullish investor sentiment for high techs. Randstad, which is mainly active in temporary employment services, was able to reap the benefits of the exceptionally good market uptrend -- as was sector rival Content which is not an AMX component stock. One of the few stocks to end the month down was industrial equipment maker Stork.
Gainers also far outnumbered losers on the domestic issues market. Smit Internationale and PC manufacturer Tulip made major gains, both having announced they were in talks with strategic partners -- without however giving any details on the nature of the partnership. Transformer maker Smit Trafo's announcement that it was postponing the publication of its 1995 results until the autumn had little impact on its share price in the wake of the major losses this stock has incurred since its stock exchange introduction. Software company Baan implemented a stock split and rose further, as a result of which this relatively junior stock has already outstripped veterans such as KLM and DSM in terms of market capitalization.
In addition to the secondary placement of a large package of Vendex shares, May saw the successful stock market launch of Dutch packager Van Leer and Toolex Alpha, a Swedish manufacturer of machinery for the CD industry. In addition there were several firms who announced they were weighing a stock exchange introduction in the long term.
New Issues
Bonds in May
02/05/96 Commerzbank Aktiengesellschaft 6 1/2 percent '96-06,
3 million guilders
02/05/96 Kredietbank International Finance NV 5-7 percent '96-02,
2 million guilders
03/05/96 NV Bank Nederlandse Gemeenten, 4 1/4 percent '96-99,
DM 3 million
09/05/96 De Nationale Investeringsbank NV 5 percent '96II-01,
50,000,000 guilders
10/05/96 ABN AMRO Bank NV 3 percent '96-00, 2 million guilders
10/05/96 NV Bank Nederlandse Gemeenten, 4 3/8 percent '96-06,
2 million Swiss francs
17/05/96 NV Bank Nederlandse Gemeenten, 5 7/8 percent '96-99,
US$ 2 million
17/05/96 NV Bank Nederlandse Gemeenten, 6 3/4 percent '96-06,
3 billion French francs
17/05/96 Cooperatieve Centrale Raiffeisen-Boerenleenbank BA,
10.1 percent, 200 billion lira
21/05/96 Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, 5
3/4 percent, '96-01, 5 million guilders
21/05/96 Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, 6
1/4 percent, '96-99, US$ 2 million
21/05/96 Rabo Australia Limited, 4 3/4 percent '96-99, DM 3
million
22/05/96 ABN AMRO Lease Holding NV 8 1/8 percent, '96-98, Aus$
1 million
22/05/96 Philips Electronics NV, 7 percent, '96-08, 3 million
guilders
28/05/96 NV Bank Nederlandse Gemeenten, 6 1/8 percent, '96-99,
US$2.5 million
28/05/96 Dresdner Finance BV, 5 1/4 percent '96-01, 4 million
guilders
30/05/96 NV Bank Nederlandse Gemeenten, 7 3/8percent, '96-99,
125,000,000 pounds stg
Shares in May
03/0/96 NV Koninklijke KNP BT, secondary offering, 49,200,000
guilders
03/05/96 Koninklijke Emballage Industrie Van Leer NV
introduction through issue and secondary offering
46,104,320 guilders
10/05/96 Arnhemsche Maatschappij tot het houden van aandelen
Akzo Nobel, introduction through issue and secondary
offering 1,06,300,000 guilders
10/05/96 Toolex Alpha NV, introduction through issue and
secondary offering 341,376,000 guilders
15/05/96 Koninklijke Emballage Industrie Van Leer NV, secondary
offering, 68,415,648 guilders
For more information, please contact:
H.S. de Ranitz
Amsterdam Exchanges NV
tel: + 31 20 523 4014
Paddy Manning
St James Corporate Communications
tel: + 44 171 436 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.