AEX during the financial crisis.

As we all know, 2007, 2008 and 2009 were the years of the financial crisis. Worldwide companies went bankrupt, most of these companies were banks. Because of the rising uncertainty on the American mortage market, the AEX index dropped to 401 index points. When these uncertainties kept rising, Dutch financial institutions like Fortis, Aegon and ING, began to make less profit. Because of that the AEX's index points dropped even further.

In the beginning of the year 2008, the AEX bit by bit recoverd. It got close to 500 index points, but it did not take long before it dropped again. On 29 september, 2008 the index points dropped 8,8 percent, and if that was not enough, just a week later it dropped another 9 percent. It was 8 oktober, 2008 that the AEX's index points got below 300. Because of the development on the American index Wall Street( it dropped 7 percent), the AEX dropped another 10 percent, to reach 254 index points. So in less than a year it dropped from almost 500 points, to just 254 point. The AEX closed the year at 245,94 points, that means they lost a staggering 52 percent in just one year. Never had a lost been bigger than this.

The year 2009 began hopefull, in 2 months they reach 270 points. But when on 9 march, 2009 Fortis goes bankrupt, the AEX's index points drop to 194,99. The las time the index got below 200 points was in 1995. Besides that, the year 2009 has been a good year for the AEX. At this moment it has 337 points, that is a rise of almost 73 percent since march this year. 2009 has been the best year for the AEX in the last decade.

Composition of the AEX

As I mentioned in my first blog, the AEX is composed of 25, mostly Dutch, companies. In this blog I am going to tell you some more about the biggest, and most succesfull companies.

In the AEX index there are quite a few unknown companies, like Boskalis, Wolters Kluwer, ASML, Fugro and Corio. There are also some companies that are welknown, at least in The Netherlands they are. ING for instance is a Dutch financial institution, who offer banking and insurance services. Because of their good reputation they are a attractive for stock buyers. With offices all over the world, they are not just well known in The Netherlands but also in countries like the United States of America, Germany and even as far as Australia.

Another well known company in the AEX index is Ahold. Ahold is a major international supermarket operator from Dutch origin. Ahold is not just part of the AEX index, but also of the Frankfurt Stock Exchange. They have several companies under their name, like Albert Heijn (a Dutch retailer), Gall & Gall (liqour shop), Etos (drug store) and many more.

The most succesfull and well known company in the AEX is Unilever. Unilever is a multinational corporation, formed of British and Dutch parentage. They own many of the world's consumer product brands in foods and personal care. They employed 174.000 people worldwide. To give you an impression of how big this company is, these are some of the brands they own; AdeZ, Axe, Becel, Ben & Jerry's, Bertolli, Bleu Band, Bona, Calvé, Cif, Conimex, Dove, Hertog, Knorr, Lipton, Ola, Robijn and many more. In total they own 54 brands worldwide.

Before march 2009, Fortis was also a part of the AEX. Fortis was a financial instition who offered banking and insurance services. But they did not make it through the financial crisis.

AEX, The Beginning.

The AEX index, derived from Amsterdam, is a stock market index composed of Dutch companies that trade on Euronext Amsterdam. It started in 1983. It is the biggest stock index in The Netherlands, aswell as in Europe. The total value of all stocks in this index is 250,9 billion euro's.

The AEX index is composed of 25 companies. These companies offer stocks, a share of their company, to people. The price of one stock is based on the index points. So it's best to buy them when the points, so the price, is low, and sell them when the points are high. It sounds simple, but actually it's quite hard. When you buy a stock from wich the price is dropping, you run the risk that it will only drop further. So you need to do a lot of research before buying stocks.

The AEX started from a base level of 100 index points. The index's peak is 703,18 index points, that was reached on 5 september 2000. In the following three years the index's points more then halved. It wasn't untill 2004 that it recovered.

The AEX enjoyed its second largest one-day loss on september 29, 2008. In one day the index closed down almost 9% lower. The period 1998-2008 has been a bad decade for the AEX index. In this decade the AEX was the second worst performing stock index.

The year 2009 has not been a very good year for the AEX aswell. For the first time since years, the index's points got below 300. The cause of this was the financial crisis. A lot of companies who offer their stocks on the AEX got hit hard by the crisis. (In my next blogs I will be telling you more about this.) But in the last few months it recovered and it is stable at around 330 index points.