The AEX-index® is 25 years old this year. The index, which is made up of the 25 most traded shares on the Amsterdam stock exchange, began life as the EOE-index (European Option Exchange) on 4 March 1983. Europe’s first blue chip index started with just 13 companies, but by 1990 the number of constituents had grown to 25, and the index covered 82% of the market.
Over the past 25 years the AEX index has evolved into a product that enjoys both national and international popularity. In addition to financial analysts and journalists, a growing number of financial institutions use the AEX index as an underlying value for a wide range of products. There are now 243 different products based on the index, and a total of 39 issuers, of which 25 are from outside the Netherlands.
The option on the AEX index, introduced in 1987, has become the exchange’s most actively traded product. According to Joost van der Does de Willebois, chairman of NYSE Euronext Amsterdam, “We are proud of what the AEX index has achieved in the past 25 years, and the fact that a national index has evolved into an international product. The volume in AEX index contracts has grown at an average annual rate of 25% since 2000.”
The weekly option, introduced in May 2006, is one of the fastest growing products at Liffe, NYSE Euronext’s derivatives market, with an average daily turnover of 20,000 contracts. Liffe will introduce a daily option on the AEX index on 31 March 2008.
Seven companies have been included in this leading indicator of the Amsterdam market since its launch in 1983: Koninklijke Ahold, Akzo Nobel, Heineken, Royal Dutch, ING Groep, Koninklijke Philips Electronics en Unilever.
Since 1990, when the index was expanded to include 25 companies, the combined market capitalisation of all index shares has risen by 547% from €83 billion to €456 billion as of the end of January 2008, when the new composition was announced. In the same period, the index rose by 337%, from 131.04 to 441.33. In terms of the index’s base of 45.38 on 3 January 1983, it has grown by 973%.
The high level of market coverage (87% based on the new composition announced at the end of January 2008) and a correlation of 99.38 with the general market index (the AAX) are good indications of just how highly representative the AEX index is.
