11 December 2018Reading time: 3 minutes

Just like other indices the AEX has been under pressure for a longer period of time, due to concerns about the trade dispute between the United States and China. The US wants to reach an agreement with China before March 1st 2019. Should both parties not succeed to do so, the US will implement new trade tariffs. Meanwhile the US and China are in conflict about the recent arrest of Huawei CFO Meng Wanzhou in Canada. China has threatened Canada with ‘big consequences‘ if Canada decides to extradite Wanzhou to the US. It remains to be seen how this conflict will develop.

Investors are also concerned about the uncertainties around the Brexit, from which the results are still unknown at the moment of writing this article. For example, the British could decide unilateral to withdraw their request to step out of the European Union. According to the Algemene Rekenkamer a ‘no deal’ Brexit, in which the UK steps-out of the EU without any agreement, could cost the Netherlands 2,3 billion euro or more in total for the next five years. Amongst other things, the Netherlands would have to contribute to the compensation for the fall-out remittance from the UK to the EU.

Furthermore, the European Central Bank expressed their concerns about Italy by the end of November, claiming that Italy is now extra vulnerable. Italy has to refinance many bonds in the coming two years and according to the ECB there is a risk that when Italy would get in financial problems, other European countries might follow.

Royal Dutch Shell is one of the heavyweights within the AEX. In the past period the share was under pressure due to the plummeting oil prices. Early December this changed after the OPEC decided together with allies like Russia, to lower the oil production with 1,2 million barrels per day. As an result the price for one barrel of Brent oil increased that same day with more than 4 percent to almost 63 dollar. Also the stock price of Royal Dutch Shell rose with more than 4 percent to approximately 26 euro.

The AEX is currently (10.12.2018) hovering around 500 points, where earlier this year the index was at 544,79 points. Compared to other indices the AEX doesn’t perform poorly. While the AEX including dividends has up to now reached a yield of more than 5 percent this year, other indices have lost value. For example, the indices of France and Germany have lost respectively 10 and 15 percent.

The future price of the AEX index is subject to several political, industrial and sector specific as well as economic factors. Investors should consider such risk when making their investment decisions. Developments can be different at any time than investors expect, which can result in capital losses.

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26/09/2021 01:50:46