Por Tommy Wilkes, Toby Sterling, Abhinav Ramnarayan y Huw Jones
AMSTERDAM / LONDON, Feb 18 (Reuters) – Everyone was betting that Frankfurt or Paris would attract London’s financial business when Britain seceded from the European Union, but it is Amsterdam that is leading the way.
Data published last week showed that in January the Dutch capital displaced London as the largest trading center for shares in Europe, capturing a fifth of the 40,000 million euros that circulate daily, compared to a tenth of the previous operations to Brexit.
Yet that’s just one of the areas in which the city has quietly leapt ahead of its rivals as it attracts UK businesses, evoking memories of its past as a global trading power in the 17th century.
Amsterdam has also overtaken London by becoming the leading listing center for companies in Europe so far this year, according to the data, and the leader in interest swaps denominated in euros, a market estimated to be worth about 135 trillion dollars in 2020.
“There is a whole culture of trading, and being close to that was very positive,” said Robert Barnes, CEO of Turquoise, a stock trading platform owned by the London Stock Exchange, which has chosen the Dutch capital over Paris as its your post-Brexit hub.
“(Here) you have some of the big institutional banks, you have specialized trading firms, a dynamic retail community. But it is also in the heart of continental Europe.”
Cboe Europe, the European arm of the Chicago Board Options Exchange, told Reuters it was preparing to launch a derivatives trading platform in Amsterdam in the coming weeks, which will emulate its Chicago business.
Asked about the reason for choosing Amsterdam, David Howson, president of Cboe Europe, replied that it is in the Netherlands where he sees “substantial growth” for his sector in Europe.
He also cited the widespread use of English in the city and that Dutch regulations are favorable to global investors, in contrast to the preference of some European countries to defend nationally-focused companies.
“You need the core of Europe to be competitive on a global scale,” Howson said. “A more insular Europe or with too many national interests makes it difficult.”
However, although the arrival of these types of companies may mean an increase in tax revenue from the volume of operations and private investment in infrastructure, Amsterdam is not experiencing a “boom” in employment, since many of the firms that are relocates tend to be highly specialized and to be smaller employers.
Turquoise’s new business in Amsterdam, for example, is located at the former headquarters of the Netherlands East India Company, the commercial mega-corporation that elevated Amsterdam to its former financial glory, yet has only four employees.
The Netherlands Foreign Investment Agency, which has led efforts to attract businesses after Brexit, told Reuters it estimates about 1,000 new jobs created by financial firms that have moved to Amsterdam since Brexit. .
This is a fraction of the estimated 7,500-10,000 jobs that have left London for the EU since 2016, when the UK voted to leave the bloc, and a drop in the bucket compared to financial workforce of the British capital, which exceeds half a million.
Many investment banks with their large staff have looked elsewhere on the continent, deterred in part by the kingdom’s laws, which limit bankers’ bonuses.
HOW IT’S GETTING AHEAD
Amsterdam leads the list of IPOs in Europe this year, having attracted $ 3.4 billion, according to data from Refinitiv. One of the firms that have started trading on the continent is the Polish InPost, which raised 2,800 million euros in the largest IPO in Europe in 2021 to date. Spanish financial technology company Allfunds, Dutch startup WeTransfer, and two companies without an operating plan known as “blank checks” – one backed by former Commerzbank CEO Martin Blessing and the other by French magnate Bernard Arnault- they plan to list on Euronext Amsterdam.
At least three tech companies from Central and Eastern Europe are also looking into the possibility of listing in Amsterdam, as Brexit reduces London’s attractiveness, financial sources told Reuters.
Banking sources that work in the two companies “blank checks”, or with special purpose of acquisition (SPAC, for its acronym in English), pointed out that the Dutch regulation is the closest thing to the United States norms, which increases its world appeal.
In the market for interest swaps denominated in euros, the Amsterdam and New York platforms have accounted for most of the business lost by London, whose share fell from just under 40% in July to just over 10% in January, according to IHS Markit data.
This makes the Dutch capital the main European trading center, an important advance compared to last July, when the city’s platforms only dominated 10% of the market.
Amsterdam will also become the headquarters for European carbon trading, with a trading volume of 1 billion euros a day, when the Intercontinental Exchange (ICE) moves the market from London in late of this year.
(Edited by Rachel Armstrong and Pravin Char; translated by Michael Susin at the Gdansk newsroom)