12 December 2017Reading time: 3 minutes

Early August we wrote how the AEX-index benefited from good quarter results of companies listed on the Dutch stock market, although some critical comments were also made. For example, to create a future-proof Dutch economy, especially the government should invest more in upcoming sectors. With the new installed government there has come more clarity on the course that the Netherlands wants to set out in the coming years, but it remains to be seen how these plans will work out.

In the past period, the Dutch economy continued to grow. Numbers from the Centraal Bureau voor de Statistiek (CBS) show that over the third quarter the growth was 3 percent on an annual basis. Both export and investments grew with 6 percent, while consumers spend 2,5 percent more and the consumer confidence is at an all-time high compared to 10 years ago.

Beside this the European Commission was also very positive about the Dutch economy in their fall prognosis. It is expected that the announced extension of the government spending will result in an extra positive effect in 2018 and 2019. According to calculations of the European Commission the gross domestic product will grow this year with 3,2 percent and in the following years with 2,7 percent and 2,5 percent. Analysts from ABN AMRO share this positivism. They expect that the Dutch economy will grow with approximately 3,25 percent over 2017, which would be the highest growth rate since 2007.

Several factors pushed up the stock prices of the heavy weights within the AEX in the past period. For example, Royal Dutch Shell benefited among other things from the announced that OPEC-countries and Rusia will continue to maintain the oil production limitation. This supports the oil prices and because of that the stock prices of Vopak and SBM Offshore also rose.

Also ArcelorMittal benefited in the past period from a reviving steel market. The worldwide demand for steel increases, while Europe wants to take actions to protect its own steel market.

Despite these positive developments there are still several uncertainties which market experts have to take into account. For example the geopolitical tensions have increased since the combined air force drills of the United States and South-Korea. According to North-Korea this makes a war with South-Korea inevitable. In the middle-east geopolitical tensions increased after the American President Donald Trump acknowledged Jerusalem as the capital city of Israel. These developments could destabilize the growth of the world economy and put pressure on the AEX-index.

Since our last article early August about the AEX, the index grew with 2,5 percent to 544,45 points. Compared to early 2017 the AEX is almost 12 percent higher. It remains to be seen how the index will move in the coming period.

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21/09/2019 20:07:50