Go long on tulips

Liam Robb continues our series on the world's stock markets with a tour through Holland, Hong Kong and Hungary

Holland

has traditionally been the most equity-friendly of the Continental European countries. Along with the UK, its privately funded pensions industry is one of the few to have had time to develop.

Pension funds managed per capita are currently the highest in the world; much of this money finds its way into the stock market - the eighth largest in the world. Accordingly, Dutch stocks have had a good run over the past five years - the last 12 months being no exception and, as in much of the rest of Europe, the market has recently reached an all-time high.

The Amsterdam Stock Exchange is, in fact, the oldest exchange in the world; as long as 400 years ago investors were being offered the opportunity to buy shares in cargoes on the route to the East Indies. Nowadays, Royal Dutch, the Anglo-Dutch conglomerate which includes Shell Oil, is the main focus of investors' attention.

Of the other 531 companies listed, big players include Unilever, Philips Electronics, Polygram and Heineken. Growth in is still predicted to be the best in Europe over coming months. Given that the largest rise in consumer expenditure has been in financial savings products and that, if anything, interest rates are likely to rise, Andy Carter from the European desk at Gartmore believes banks like ABN Amro and ING should help the market continue its run of form.

Hong Kong

The countdown is on for Hong Kong's population of six million. On 1 July, Britain's 99-year lease on the New Territories comes to an end. It has not deterred Hong Kong corporations from rushing to raise money - pounds 500m was raised in the first two weeks of this year via share placements and more are expected to follow. Once seen as a potential deterrent to foreign investment, the colony's reversion to Chinese rule is now being viewed with increasing optimism; as China moves, albeit sluggishly, towards a free-market economy, so the country's one billion-strong population is likely to provide rich pickings for a number of Hong Kong-listed industries.

Indeed, many "Red Chips" - companies which have almost exclusive exposure to China - are already listed in Hong Kong. The Hang Seng is the most widely observed index and comprises 33 companies - the largest include HSBC Holdings, Hutchinson Whampoa and HK Telecommunication.

Despite the fact that unemployment is on the rise and that, due to the HK dollar being pegged to the US dollar, interest rates have risen, the 540 companies listed on the world's ninth biggest stock exchange enjoyed a record year last year.

Hungary

Land-locked and bordering seven states, Hungary enjoys the highest standard of living of the former Communist bloc countries - 90 per cent of households have refrigerators, washing machines and TVs. Once suffering from a rigid and centrally planned economy, the privatisation of state companies has been one of the most rapid in the whole of Europe.

Having been closed for the previous 45 years, the Budapest Stock Exchange reopened for business in 1990 and now 60 per cent of turnover is accounted for by foreign investors.

The large-scale denationalisation of Hungarian utilities and banks began in 1995 and 44 companies are currently listed. In the past privatisation has mainly involved selling companies to Western investors for cash. However, the smaller domestic investor is beginning to return to the market and helped the BUX index, comprising the 21 most liquid stocks, to become one of the world's best-performing last year; Sterling returns were in excess of 130 per cent.

Privatisation continues apace. Later in the year, Matav, the state telecoms company which is majority-owned by Deutsche Telekom, makes an initial public offering of around 17 per cent of its stock which should be worth around $500m. Other offerings in the pipeline include a secondary tranche of Magyar Olaj-es Gazipari (Mol) the oil and gas conglomerate and currently the largest company in Hungary.

Numerous investment houses manage funds with exposure to , including Gartmore, Nat West, Barings and Invesco. Jupiter's European unit trust and TR European Growth investment trust have been the best performers over the past year. These houses also run numerous specific Hong Kong funds. Of the 1,500 or so unit trusts available in the UK, HSBC's Hong Kong Growth fund is the best-performing over the past five years. John Govett runs the Hungarian Investment Trust

Start your day with The Independent, sign up for daily news emails
Suggested Topics
News
peoplePair enliven the Emirates bore-draw
Arts and Entertainment
tvPoldark episode 8, review
News
Britain's opposition Labour Party leader Ed Miliband (R) and Boris Johnson, mayor of London, talk on the Andrew Marr show in London April 26
General electionAndrew Marr forced to intervene as Boris and Miliband clash on TV
Arts and Entertainment
Ramsay Bolton in Game of Thrones
tvSeries 5, Episode 3 review
Have you tried new the Independent Digital Edition apps?
Finacial products from our partners
Property search
Put the phone down on the coldcallers who see pension liberation as an opportunity to liberate your pension from you

Pension freedoms: How to deal with cold calls from scammers

Sean O'Grady offers advice on keeping your money safe
Switching to a better bank account is much easier than it used to be

More people are switching current accounts – but what do the figures mean?

Experts disagree about the 7% increase over the past year

The chance of getting what appears to be free money can be hugely attractive, especially to first-time buyers who can be fooled into thinking it’s extra cash to buy the essential new items they need for their dream home.

Beware the boom in cashback mortgage deals

Too many mortgages are being sold with misleading gimmicks

The firm’s revenues slumped by a third to £217 million in a disastrous 2014

Wonga results could get even worse this year, chief admits

The firm’s revenues slumped by a third to £217 million in 2014

The cost of a buildings policy has dropped by 10.1 per cent over the year, with the cost of a contents policy falling by 8.2 per cent

Simon Read: Mild winter cuts the cost of home insurance

The average quote for a buildings and contents policy has fallen by 3.6 per cent

Don't count your retirement money yet: employers will stop receiving a pension rebate next year and their staff may lose out

Defined-benefit pension schemes: Rebate change in 2016 may leave you out of pocket

Employees in defined-benefit schemes are held up as the lucky ones, but the state pension scheme will be overhauled in April 2016
Labour will raise the national minimum wage to more than £8 an hour by October 2019 (EPA)

Barclays new Blue Rewards hands cash to customers. What’s the catch?

Joining Barclays Blue Rewards costs £3 a month but then lets customers in for handouts of up to £15 a month

New research reveals that despite the recovering economy, four out of five low-income households have seen no sign of their financial situation improving

Hard-up families could be eligible for financial help

A charity is urging anyone struggling financially to see if they could get help from the state

When is the best time to buy foreign currency?

Video: With an election looming, a hung parliament could hit sterling

General Election 2015: Vote for the party that will boost your finances

Experts warn that the general election is unlikely to lead to stable markets. Simon Read talks to two investment managers who are advising caution

Make the most of your money in 2015-16: The end of the tax year is the beginning of the next...

The new tax year brings with it a raft of new rules and regulations

General Election 2015: Will pension reform be a major factor?

Video: Tom McPhail, head of pensions at Hargreaves Lansdown, says May's outcome could alter your pension

General election 2015: David Cameron's promise brings uncertainty to investors

Video: Simon Read talks to Fidelity's Tom Stevenson

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

    £24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Business Analyst - Financial Services - City, London

    £50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

    SThree: Trainee Recruitment Consultant

    £18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

    Day In a Page

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    How a costume drama became a Sunday night staple
    Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

    Miliband promises no stamp duty for first-time buyers

    Labour leader pushes Tories on housing
    Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

    Aviation history is littered with grand failures

    But what went wrong with the SuperJumbo?
    Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

    Fortress Europe?

    Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
    Never mind what you're wearing, it's what you're reclining on

    Never mind what you're wearing

    It's what you're reclining on that matters
    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence