Founded in 1602 alongside the creation of the Dutch East India Company (VOC), the Amsterdam Stock Exchange stands as the world’s oldest, still-functioning stock exchange.
The explosion of European trade brought the need for a financial institution where financiers could profit from international commerce. The Dutch East India Company was one of the earliest enterprises competing in the lucrative spice and slave trades. As a joint-stock company, it offered shares to investors to support its voyages, necessitating a secure and regulated place for these transactions.
Before the advent of the AEX, many regions had their own independent systems for asset valuation and trade regulation mimicking stock exchanges. However, the AEX was the first official stock market that modern trading platforms are modeled after.
The Modern Amsterdam Stock Exchange (AEX)
Over its centuries-long journey, the Amsterdam Stock Exchange has witnessed numerous changes in ownership and governance.
In 1997, the exchange merged with the European Options Exchange (EOE), and its main index was rebranded as AEX, short for “Amsterdam Exchange.”
In September 2000, the Amsterdam Stock Exchange joined forces with the Brussels Stock Exchange and the Paris Stock Exchange to create Euronext Amsterdam, the largest cash equities market in Europe. It became part of NYSE Euronext for a period, encompassing various exchanges, including the NYSE and London’s Liffe. By 2014, Euronext re-emerged as an independent entity, ranking as the sixth largest combined stock exchange by market cap in 2017. The AEX remains one of Euronext’s key indexes.
Key AEX Equity Indexes
Euronext Amsterdam boasts three broad equity indexes: the blue-chip AEX, mid-cap AMX, and small-cap AScX. The AEX, initiated in 1983, includes over 20 of the most actively traded Dutch companies such as Unilever, ING Group, Philips, and Royal Dutch Shell. It ranks among the leading national indices within Euronext, alongside Brussels’ BEL 20, Paris’s CAC 40, and Germany’s DAX.
Key Takeaways
- The Amsterdam Stock Exchange, founded in 1602, is celebrated as the world’s oldest stock exchange.
- The AEX coalesced with the Brussels and Paris stock exchanges to form Euronext Amsterdam in 2000.
- The three central equity indexes of Euronext Amsterdam are the blue-chip AEX, the mid-cap AMX, and the small-cap AScX.
- More than 20 highly traded Dutch companies are listed on the exchange.
Evolutions and Adjustments
The composition of the AEX index is reviewed quarterly, with a major recalibration in March and interim reviews in June, September, and December. Changes from these reviews are implemented on the third Friday of the month. Previously, updates were conducted annually in March, until 2008.
Being a market capitalization-weighted index, initial weightings for any company are capped at 15%. Weightings are adjusted concerning closing prices on March 1. During quarterly reviews, adjustments are kept minimal relative to the prior day’s weightings without re-capping.
Related Terms: Euronext, stock market, blue-chip stocks, financial history, European stock index, capitalization-weighted index.
