Unlike other countries, the Dutch have been taking part in stock trading since the beginning of the 17th century. The Amsterdam stock exchange evolved from basic commodities trading to the now highly sophisticated global securities market.
To elaborate just how immense the Amsterdam stock exchange is, you need to be acquainted with Euronext.
What is Euronext?
Euronext is a global stock exchange group created by merging 3 of the largest stock markets in Europe into one major financial giant. The Paris, Amsterdam, and Brussels stock exchange groups combined to form this entity, and it later absorbed other stock exchanges in Portugal and the U.K.
Why is this information relevant? Euronext has a market capitalization of €5.6 trillion(Euros) or roughly $6.5 trillion (USD). In principle, stock trading in the Netherlands accounts for a significant chunk of the global stock market.
The takeaway here is that the Netherlands has, over the years, met and surpassed economic growth predictions, making it an attractive destination for corporate and individual investors. Several local and foreign investors are attracted to the Dutch capital because of its strategic proximity to Europe’s metropolis. A favorable political climate is also another reason it is luring investors from every corner.
What You Should know-Influencing Factors
Although the Netherlands is ripe for investment, it still shares the same concerns as other stock markets across the globe. This means that if you want to start stock trading in the Netherlands, you will need to know a few things.
Rapid Economic Growth
Note that in stock trading, there is nothing like a sure thing. However, countries with a favorable political climate and secure financial markets balance the scale by attracting foreign investment in large numbers. The Netherlands recorded a 3.8% economic growth rate as of June 2021, surpassing the predicted 3.1% projected for this period.
Economic growth is a fundamental consideration for investors, and with the presence of low-risk investment entities like Saxo Bank Netherlands, Amsterdam has become a rather attractive prospect.
Market Accessibility
On the plus side, the Amsterdam Stock Market provides the best and most efficient single entry point into global market listings, allowing access to plenty of lucrative investment opportunities. This capital market doesn’t just expose you to Europe’s vast financial listings-you also gain access to some of the most respectable international investment firms out there.
Innovation/Strategic Location/Investment Opportunities
Although these are slightly different influencing factors, they explain why investing in the Netherlands stock market is a good idea. It is ranked 2nd in innovation and is within 500km of 170 million consumers in several countries. Consider that the Netherlands is home to 25 of the most liquid capital stocks, and it has the highest economic growth rate in the European Union.
Everything about the Netherlands points to a lucrative investment opportunity for both international and local investors.
Problem Areas
While stock trading in the Netherlands has a lot of value points, some issues negatively affect investment opportunities. These are legitimate concerns that may make or break investor confidence.
Brexit Concerns/Uncertainty
The trade relationship between the E. U and the U.K is clouded with uncertainty after the British exit from the E. U. For the Netherlands as a historical trade partner, this has resulted in high market volatility as trade costs increase. Experts estimate that the Dutch economy could lose billions of Euros in the next decade, seriously denting the once seamless Dutch-UK trade ties.
For businesses or individuals looking to invest here, it is critical to understand how Brexit has influenced trade patterns and how currency pairs will are affected by this process.
The Euronext Dilemma
One high-risk factor is that France, Netherlands, and Belgium are economically tied. While the Netherlands is experiencing spats of economic progression, a downturn in any of the other two economies will influence revenue and the value of member companies.
In principle, stock trading in the Netherlands relies heavily on the health of Europe’s major economies.
Bottom Line
The Netherlands provides an exciting prospect for investors, and with an increasingly technical workforce, it all but guarantees long-term profitability.
