How Amsterdam is stealing a march on rivals as Brexit trading hub
Skip to main content
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Splash
  • Features
  • Videos
  • Long Read
  • Games
  • Epaper
  • More
    • COVID-19
    • Bangladesh
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Subscribe
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
The Business Standard
THURSDAY, MAY 19, 2022
THURSDAY, MAY 19, 2022
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Splash
  • Features
  • Videos
  • Long Read
  • Games
  • Epaper
  • More
    • COVID-19
    • Bangladesh
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Subscribe
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
How Amsterdam is stealing a march on rivals as Brexit trading hub

Global Economy

Reuters
18 February, 2021, 01:40 pm
Last modified: 18 February, 2021, 01:49 pm

Related News

  • UK cost of living crisis to peak later this year, BoE to press on with rate rises
  • Boris Johnson trails Labour in poll on handling of UK inflation
  • One in four Britons skip meals due to inflation, survey shows
  • UK inflation hits 40-year high of 9.0% as households suffer
  • Britain to set out new steps to tackle post-Brexit N Ireland trade

How Amsterdam is stealing a march on rivals as Brexit trading hub

Amsterdam has also overtaken London to become Europe’s number one corporate listing venue so far this year and the leader in euro-denominated interest-rate swaps

Reuters
18 February, 2021, 01:40 pm
Last modified: 18 February, 2021, 01:49 pm
Overview of Amsterdam's stock exchange interior as Prosus begins trading on the Euronext stock exchange in Amsterdam, Netherlands, September 11, 2019. REUTERS/Piroschka van de Wouw/File Photo
Overview of Amsterdam's stock exchange interior as Prosus begins trading on the Euronext stock exchange in Amsterdam, Netherlands, September 11, 2019. REUTERS/Piroschka van de Wouw/File Photo

All the talk was of Frankfurt or Paris luring London's financial business as Britain peeled away from the EU. Yet it is Amsterdam that is proving the most visible early winner.

Data last week showed the Dutch capital had displaced London as Europe's biggest share trading centre in January, grabbing a fifth of the 40 billion euros-a-day action, up from below a tenth of trading pre-Brexit.

Yet that is just one of several areas the city has quietly stolen a march on its rivals as it attracts businesses from Britain, evoking memories of its history as a global trading powerhouse in the 17th century.

Amsterdam has also overtaken London to become Europe's number one corporate listing venue so far this year, data shows, and the leader in euro-denominated interest-rate swaps, a market estimated to be worth about $135 trillion in 2020.

"There is a whole culture of trading, and to be close to that was very positive," said Robert Barnes, CEO of London Stock Exchange-owned share trading platform Turquoise, which has selected the Dutch capital over Paris for its post-Brexit hub.

"You have some of the big institutional banks, you have specialist trading firms, a dynamic retail community. But it's also in the heart of continental Europe."

Cboe Europe, an equities exchange, told Reuters it was launching an equities derivatives venture in Amsterdam in the coming weeks to emulate the trading model built in its Chicago home.

Asked why Cboe chose Amsterdam over rivals, Howson said the Netherlands was where he saw "substantive growth" for his industry in Europe. He also cited the wide use of English in the city and Dutch regulation being friendly to global investors, in contrast to some European countries' preference for championing domestically-focused firms.

"You need core Europe to be competitive on a global scale," said Howson. "A more insular Europe or too much national interest makes that a difficult thing."

Yet while the arrival of such businesses may bring higher tax revenues from trading volumes and private investment in infrastructure, the city is not experiencing a jobs boom, as many companies relocating there tend to be highly specialised, and smaller employers.

Turquoise's new Amsterdam operation, for instance, sits in the former head office of the Dutch East India Company, the trading megacorporation that fuelled Amsterdam's rise to its former finance fame - yet it only employs four staff.

The Netherlands Foreign Investment Agency, which has led the effort to woo Brexit business, told Reuters it estimated about 1,000 new jobs had been created by financial firms moving operations to Amsterdam since Britain left the EU.

More 'Brexit' companies shift to the Netherlands as uncertainty persists

That's a fraction of the 7,500 to 10,000 jobs estimated to have left London for the EU since 2016, when Britain voted the leave the bloc, and a drop in the ocean compared with the British capital's financial workforce, which numbers over half a million.

Many investment banks with their large staffs have looked elsewhere on the continent, deterred in part by Dutch laws that limit banker bonuses.

How It's Getting Ahead

Amsterdam leads the European listings table this year, having attracted $3.4 billion-worth of initial public offerings (IPOs), Refinitiv data shows. That included Poland's InPost, which raised 2.8 billion euros in the biggest European IPO in 2021 so far.

Spanish fintech form Allfunds, Dutch web startup WeTransfer and two "blank-cheque" firms - one backed by ex-Commerzbank chief executive Martin Blessing and another by French tycoon Bernard Arnault - are planning to list on Euronext Amsterdam.

At least three technology companies from Central and East European are also considering listings as Brexit dents London's allure, bankers told Reuters.

Banking sources working on the two blank-cheque, or special purpose acquisition companies (SPACs), said Dutch regulations were closest to rules in the United States, making it easier to appeal globally.

In the euro-denominated interest rate swaps market, platforms in Amsterdam and New York have grabbed the bulk of business lost by London, whose share fell from just under 40% in July to just over 10% in January, IHS Markit data shows.

That made the Dutch capital the biggest player, an advance from last July when platforms in the city commanded just 10% of the market.

Amsterdam will also become home to the European carbon emissions trading, worth a billion euros a day in trading volumes, when the Intercontinental Exchange (ICE) moves the market from London later this year.

Big Banks And Bonuses

The Netherlands Foreign Investment Agency, which began analysing where Amsterdam could capitalise after Britain's 2016 decision to leave the EU, said it had identified certain financial sectors where it believed it could have an edge.

"We focused on specialist areas ... that were trading and fintech," said spokesman Michiel Bakhuizen, adding that the city played up the strength of its low-latency digital trading infrastructure.

"The big investment banks were always going to move to Frankfurt and Paris because of the Dutch legislation that is in place for bank bonuses," he added, referring to a 2015 law limiting variable pay to a maximum of 20% of base salary.

This drive to focus on specialist areas rather than appeal more broadly could be reflected in the number of companies relocating.

In response to Brexit, 47 firms have shifted operations entirely or partly to Amsterdam from London, according to preliminary data compiled by New Financial, a think-tank.

That is lower than the 88 firms that have moved business to Paris and the 56 to Frankfurt.

Companies to have shifted operations to the Netherlands include CME, MarketAxess and Tradeweb. A handful of asset managers and banks including Commonwealth Bank of Australia are also relocating there.

By contrast, those firms that have moved departments and staff to Frankfurt have mainly been big investment banks, including JP Morgan, Citi and Morgan Stanley, while Paris has mostly welcomed banks and asset managers, according to New Financial.

'Way Too Early To Call'

William Wright, New Financial's managing director, notes that although fewer firms have made the move to Amsterdam, the city's share "is highly concentrated by sector, with Amsterdam having a clear lead in areas like broking, trading, exchanges and fintech".

Amsterdam's apparent success, however, may be flattered because Brexit has so far hit trading hardest, and such business may be easier to move.

"The early data on the impact of Brexit is mainly trading-based, hence Amsterdam looks like it is doing particularly well," Wright added. "And I'm not making a call on Amsterdam for IPOs yet as I think it's way too early."

Sander van Leijenhorst, Brexit programme manager at the AFM Dutch financial regulator, said authorities would actually have preferred London retaining its dominance because of the efficiencies that come from concentrating everything in a single European hub, he said.

But once the implications of Brexit became clearer, it was obvious that Amsterdam - home to the world's oldest stock exchange - would appeal, he added.

"There was already a group of traders here. They tend to come together, they tend to flock together."

Analysis / Top News / World+Biz

Amsterdam / Brexit / Brexit trading hub / Trading hub / UK economy / Britain economy / British economy / Netherlands

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Nearly 58% hike in bulk power price on cards
    Nearly 58% hike in bulk power price on cards
  • Illustration: TBS
    Let taka slide
  • Inflation jumps to 6.29% in April
    Inflation jumps to 6.29% in April

MOST VIEWED

  • Design artists work on their computer terminals at the Start-up Village in Kinfra High Tech Park in the southern Indian city of Kochi October 13, 2012. REUTERS/Sivaram V/Files
    Zombie unicorns: Indian startups go from feast to famine
  • File photo
    Dollar gains, stocks retreat as inflation jitters return
  • A view of the city skyline in Shanghai, China February 24, 2022. Picture taken February 24, 2022. REUTERS/Aly Song
    China, US lead rise in global debt to record high $305 trillion - IIF
  • The logo of Amazon is seen at the company's logistics center in Bretigny-sur-Orge, near Paris, France, 7 December, 2021. PHOTO: REUTERS/Gonzalo Fuentes
    Amazon discriminates against pregnant and disabled workers, New York alleges
  • A sign for BlackRock Inc hangs above the company's building in New York U.S., July 16, 2018. REUTERS/Lucas Jackson
    Global bond ETF industry to triple to $5 trillion by 2030 - BlackRock
  • Photo of World Bank. Photo: Collected
    World Bank to offer $30B over 15 months to ease looming food crisis-Treasury report

Related News

  • UK cost of living crisis to peak later this year, BoE to press on with rate rises
  • Boris Johnson trails Labour in poll on handling of UK inflation
  • One in four Britons skip meals due to inflation, survey shows
  • UK inflation hits 40-year high of 9.0% as households suffer
  • Britain to set out new steps to tackle post-Brexit N Ireland trade

Features

‘The geopolitical landscape is undergoing profound change, Dhaka needs to craft proactive strategies’

‘The geopolitical landscape is undergoing profound change, Dhaka needs to craft proactive strategies’

21h | Interviews
Graphics: TBS

Facebook and Bangladeshi politicians: A new tide in mass political communication?

22h | Panorama
Despite Bangladesh having about 24,000 km of waterways, only a few hundred kilometres are covered by commercial launch services. Photo: Saad Abdullah

Utilising waterways: When common home-goers show the way

1d | Panorama
Illustration: TBS

How Putin revived Nato

1d | Panorama

More Videos from TBS

Cannes Film Festival 2022 resumes after 2 years

Cannes Film Festival 2022 resumes after 2 years

10h | Videos
Pension is coming for all

Pension is coming for all

11h | Videos
Bakery business in crisis for increased raw material prices

Bakery business in crisis for increased raw material prices

12h | Videos
Foods that have the most protein

Foods that have the most protein

12h | Videos

Most Read

1
Representative Photo: Pixabay.
Bangladesh

Microplastics found in 5 local sugar brands

2
Mushfiq Mobarak. Photo: Noor-A-Alam
Panorama

Meet the Yale professor who anchors his research in Bangladesh and scales up interventions globally

3
The story of Bangladesh becoming a major bicycle exporter
Industry

The story of Bangladesh becoming a major bicycle exporter

4
How Bangladesh can achieve edible oil self-sufficiency with local alternatives
Bazaar

How Bangladesh can achieve edible oil self-sufficiency with local alternatives

5
Govt tightens belt to relieve reserve
Economy

Govt tightens belt to relieve reserve

6
PK Halder: How a scamster rose from humble beginnings to a Tk11,000cr empire
Crime

PK Halder: How a scamster rose from humble beginnings to a Tk11,000cr empire

The Business Standard
Top
  • Home
  • Entertainment
  • Sports
  • About Us
  • Bangladesh
  • International
  • Privacy Policy
  • Comment Policy
  • Contact Us
  • Economy
  • Sitemap
  • RSS

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net

Copyright © 2022 THE BUSINESS STANDARD All rights reserved. Technical Partner: RSI Lab