Slight increase in debt issuances, while Dutch stock market witnesses historic EUR 101 billion rise in market capitalization
The first quarter of 2015 saw gross issuance of money market and capital market paper rise to EUR 156 billion (up 26% q-o-q). As a result of net issuance of EUR 33 billion, the outstanding amount of debt securities increased to EUR 1,924 billion (i.e. more than three times GDP).
The total value of listed Dutch shares rose by EUR 101 billion, which was the largest increase since the last quarter of 1999. With the equity market continuing its revival, there has also been a strong increase in initial public offerings (IPOs) and new share issues over the past two years. Dutch companies raised EUR 17 billion in additional equity capital over the past eight quarters.
Rise in capital market issuance
In the first quarter of 2015, Dutch institutions issued capital market paper worth EUR 88 billion (up 54% q-o-q, Chart 1). Given a low level of maturing debt paper, the total amount of outstanding bonds rose to a new record high of EUR 1,793 billion (i.e. more than three times GDP). After a dip in the past two quarters, long-term debt paper issued by banks grew again in the first quarter of 2015 (by EUR 28 billion, versus EUR 15 billion in the previous quarter). This and the appreciation of the US dollar resulted in the nominal value of outstanding bank bonds reaching a record high of EUR 464 billion (up 12.2% q-o-q). The Dutch State also issued bonds, with a value of EUR 17 billion (gross), bringing total outstanding Dutch sovereign bonds to EUR 339 billion (up 1.5% q-o-q), the highest level ever.
Chart 1: Gross Dutch capital market issuance (on a quarterly basis)
Limited money market paper issuance
In the first quarter of 2015, gross money market paper issuance came to EUR 68 billion (up 18.2% q-o-q, see Chart 2). After the previous quarter, this was the lowest money market issuance volume in more than ten years. Total outstanding money market paper rose to EUR 131 billion (up 7.3% q-o-q) as a result of limited repayments.
Chart 2: Gross Dutch money market issuance (on a quarterly basis)
Rise in market value and issuance of Dutch listed shares
The first quarter of 2015 saw an increase in the market value of listed companies to EUR 735 billion (Chart 3). Mainly due to price increases, the value of Dutch quoted shares rose by EUR 101 billion (up 13.7% q-o-q), the largest increase in absolute terms since the last quarter of 1999 and in relative terms since the third quarter of 2009. The value of Dutch shares had not exceeded EUR 700 billion since 2007. The low was reached in the first quarter of 2009, with a market value of EUR 266 billion.
Chart 3: Developments in Dutch listed shares
Since the start of the revival of the Dutch stock exchange in mid-2011, there has been an increase in Dutch companies floating their shares on the equity market (Chart 3). There were relatively large IPOs in 2013 by Constellium and Frank's International, with Euronext, IMDC, NN Group and others floating their shares in 2014. In the first quarter of 2015, there were IPOs by companies like GrandVision, Lucas Bols and Refreco Gerber. IPOs raised EUR 1,586 million in total, versus EUR 850 million in the last quarter of 2014.
In addition to IPOs, several listed companies have issued new shares in recent years, with the largest new issues carried out by Royal KPN and ASML Holding in the second quarter of 2013. In the first quarter of 2014, Rabobank floated its member certificates.
Beyond IPOs , there were some large redemptions related to repurchases of own shares in the first quarter of 2015, for example by ASML Holding, Royal Philips and Royal Dutch Shell, totalling EUR 1,224 million, versus EUR 1,481 million in the last quarter of 2014.