Rising stock prices drive market value of Dutch companies to record high
Driven by rising stock prices, the total market value of Dutch companies reached an all-time high of EUR 1,407 billion in the first quarter of 2021, an increase of 13.6% quarter on quarter.
Market value of Dutch companies records unprecedented levels
In the first quarter of 2021, the total market value achieved a peak of EUR 1,407 billion, almost twice the annual national income. Mainly due to the rise in stock prices, the total market value of listed Dutch companies surged from EUR 1,238 billion at the end of 2020 to EUR 1,407 billion at 31 March 2021, an increase of 13.6% quarter on quarter. The first quarter of 2021 saw a sharp worldwide rise in stock prices. At the end of March 2021, the Dutch stock market index AEX closed just under 700 points, and the US S&P500 closed at an all-time high of almost 4,000 points. The total market value mainly includes companies listed on the Amsterdam stock market, but several Dutch companies are listed on foreign exchanges.
At the beginning of this millennium, the total market value of Dutch companies reached a first peak at the end of the year 2000, with the advent of the Internet (EUR 725 billion). This peak was passed in 2007, prior to the global financial crisis in 2008-2009 (EUR 771 billion). Since 2009 the market value of listed Dutch companies shows trend-based growth. The steady increase in the value of Dutch companies already peaked at EUR 1,261 billion just before the outbreak of the coronavirus crisis at the end of 2019.
Increase in market capitalisation driven by tech firms
Tech firms recorded large price gains in the first quarter of 2021, such as, in order of market value: ASML (+ 30.0%), Prosus (+ 7.2%), Philips (+ 11.2%) and NXP (+ 26.6%). The market value of tech firms started to rise more steeply than that of firms in other sectors in the course of 2019. This has greatly changed the composition of the total market value of Dutch companies. While between 2016 and 2018 the share of tech firms was around 16% of the total market value, it had reached more than 40% by the end of the first quarter of 2021, a level not seen before in the Netherlands.
Increasing number of foreign companies set up listed Dutch subsidiary
In addition to rising stock prices, the total market value of Dutch companies is also driven by growth in foreign companies that establish a foothold in the Netherlands. Prosus, for example, established itself as a Dutch listed company in September 2020 and is one of the largest Dutch stock-listed companies by market value (EUR 150 billion, at the end of the first quarter of 2021). Several other foreign companies have also chosen to set up a Dutch listed company, such as Airbus, Stellantis, FE New (Ferrari), STMicroelectronics, Yandex, CNH Industrial, EXOR (affiliated to Stellantis, FE New and CNH Industrial), Davide Campari and Qiagen.
In 2016, the total market value of Dutch companies with a foreign parent was on average below EUR 200 billion. By the end of the first quarter of 2021, this market value had more than doubled to EUR 468 billion. As a result, the share of companies with foreign parents has risen from 19% of the total Dutch market value in 2016 to 33% in 2021. This shift was further reinforced by Unilever in the fourth quarter of 2020, with the relocation of its registered office to the United Kingdom. As a consequence, it is no longer a Dutch but a UK company for statistical purposes.