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Dutch investors continue to invest in European countries heavily impacted by COVID-19 despite loss in value


Dutch investors purchased securities from European countries heavily impacted by the COVID-19 pandemic in March 2020. they purchased debt securities and listed equities issued in France, Italy and Spain worth EUR 3.3 billion and EUR 0.5 billion, respectively, on a net basis. Despite value losses of EUR 7.4 billion (-4.1%) for debt securities and EUR 6.2 billion (-20.0%) for equities.

Published: 07 May 2020

Debt securities purchases from heavily impacted European countries in March 2020

In March 2020, Dutch investors on balance purchased debt securities worth EUR 3.3 billion from issuers resident in France, Italy and Spain (see Chart 1). This appears from preliminary DNB figures based on reports covering approximately 80% of Dutch securities holdings.

Relative to the positions as at the beginning of March 2020, the purchases amount to 1.8% of private and institutional investor debt securities portfolios and are almost evenly divided over government bonds (EUR 1.7 billion) and corporate bonds (EUR 1.6 billion). Net purchases focused on France (EUR 3.9 billion) and Italy (EUR 0.3 billion), while net sales were concentrated in Spain (EUR 0.9 billion).

Dutch investors also purchased debt securities on balance from other countries. There were no significant cross-border movements in the positions of money market and capital market paper, except for large net domestic purchases (EUR 9 billion). Corporate and government debt securities issued in the most severely impacted countries was not treated differently from debt securities issued in other countries. In January and February 2020, Dutch investors sold debt securities issued by heavily impacted European countries on balance (EUR 1.0 billion and EUR 0.1 billion, respectively) compared to net purchases from other countries.

Source: DNB statistics

At De Nederlandsche Bank, we independently compile statistics on the Dutch financial sector and economy. This article is based on these statistics. More information on our statistics and all dashboards can be found on our Statistics homepage.

Losses on debt securities

Net debt securities purchases are relatively small compared to the heavy losses caused by the pandemic. The market value decline of the debt securities portfolio for France, Italy and Spain together amounted to EUR 7.4 billion in March 2020, representing negative return of 4.1%.

The fact that Dutch investors are buying debt securities now that bond prices are falling is understandable: institutional investors in particular tend to react in a countercyclical manner by holding. Also, by mid-March 2020 the markets recovered in response to policy measures across the world, thereby relieving pressure on fire sales prompted by the crisis in the final weeks of March.

By the end of the first quarter, Dutch investors had debt securities holdings worth EUR 180 billion from France (EUR 130 billion), Italy (EUR 21 billion) and Spain (EUR 29 billion).

Purchases – and value losses – for listed equities from heavily impacted countries

Dutch investors likewise incurred heavy losses, amounting to EUR 6.2 billion (-20.0%), on listed equities from France, Italy and Spain in March 2020, as a result of price declines. Nevertheless, they also purchased listed equities from France, Italy and Spain to a net worth of EUR 0.5 billion, compared to net sales in January and February of EUR 0.6 billion and EUR 0.4 billion, respectively (see Chart 2). The purchases represent 1.9% of the equity portfolios relative to the positions as at the beginning of March 2020. By end-March, the equity portfolios of Dutch investors stood at EUR 17.5 billion in France, EUR 3.2 billion in Italy and EUR 4.5 billion in Spain. This represents 5.4% of the total equity portfolio of Dutch investors, which has a value of EUR 470 billion figures).

Further information

More information on selected countries is available on our website. The figures presented are preliminary figures based on a sample:

  • debt securities holdings by country of issuer (preliminary figures)
  • Listed holdings by country of issue (preliminary figures)

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