Dutch surprise rivals in race for Brexit spoils

[THE HAGUE] In the race for business lost by the City of London because of Brexit, Amsterdam's stock market has surprised European rivals by carving out the biggest slice so far.

The city of canals, cheese and cannabis overtook London in January as Europe's largest share trading centre, with more than nine billion euros of EU stocks exchanging hands every day.

Other European Union cities such as Paris, Dublin, Milan and Frankfurt have also benefited from the exodus from London, but none as much as Amsterdam to date.

"This trend is, I just want to insist on that point, really affecting in a very positive manner all the locations within the European Union," Stephane Boujnah, CEO of pan-European stock market operator Euronext, told AFP.

Euronext runs the Amsterdam stock market and those of Brussels, Dublin, Lisbon, Oslo and Paris. Last year it also agreed to buy the Milan bourse from the London Stock Exchange.

"What's specific in Amsterdam is the consolidation of some players that used to be based in London" but who had offices already in the Dutch capital, he said.

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Amsterdam was also seen as "more international" than some other cities, with English virtually a second language and favourable tax conditions offered by the government, he said.

This combination "made Amsterdam very attractive", he added.

'It is irreversible'

In January, London was stunned as an average of 9.2 billion euros (S$14.8 billion) of shares were traded each day on Euronext Amsterdam together with two other Dutch share markets, overtaking London's daily figure of 8.6 billion euros, the Financial Times reported.

Mr Boujnah said figures were still similar now.

The shift has happened because Britain lacks regulatory "equivalence" that would allow it to trade EU shares.

"The trend of the migration of substance is very profound... it is irreversible," Mr Boujnah said.

"I don't think we will have a replacement of a company town like the City of London became over the years. Because what is emerging is a very solid network of integrated, interconnected, distributed financial centres." Like the rest of the world the Dutch economy is still suffering the effects of the coronavirus, but the Brexit boost has been invaluable.

In the past month the Amsterdam stock exchange has hit record high after record high.

And it's not just the trading of stocks that's on the rise in the Netherlands, but goods as well.

Dutch logistics and warehousing companies say they are being inundated with requests from British businesses who are struggling with delays at ports, increased shipping costs, and customs duties on exports to the EU.

English 'really helps'

Seko Logistics, whose Dutch operations have doubled over the past six months, say a convergence of factors has made the Netherlands an attractive foothold in the EU.

"I think most people in the Netherlands speak English, that really helps," said Seko sales director Lodewijk Bottelier.

"I think we have a very central location. The biggest port in Europe is Rotterdam. Plus we have a very favourable tax climate, where companies can set up easily with fiscal representation in the Netherlands." A total of 218 companies had moved to the Netherlands from Britain since the UK voted to leave the EU in 2016, the Dutch Foreign Investment Agency says.

These included not only British firms but also Asian and US companies that were "rethinking their European structure".

But Brexit isn't good news for everyone in the Netherlands.

Britain is the country's second largest trading partner, with exports worth over 15 billion euros to the Dutch economy last year.

The Dutch government even created a furry blue character dubbed the Brexit Monster as a publicity campaign to warn of the dangers ahead for businesses.

Many traders are now struggling with extra costs, delays and red tape when they ship goods across the Channel.

AFP