The escalation of the war in Ukraine is the main cause. Investors were shocked by the Russian attack on a nuclear power plant. ICT companies in particular – the big winners on the stock exchange last year – have lost a lot of ground in recent weeks. In addition, ING, which has large loans outstanding in Russia, lost more than 10 percent.
On November 19, all funds listed in Amsterdam were still worth 1,667 billion euros. Now that is 1,360 billion euros. The Dow Jones index has lost just 7.8 percent since Nov. 16. Since then, the AEX has already lost 18 percent. Due to the fall in share prices, pension funds could again fall below the funding ratio, which brings a reduction in pension benefits closer again. Much of the money taken out of the stock market apparently goes into purchasing government bonds. The yield on Dutch government bonds with a ten-year maturity has also fallen again in recent days after weeks of rise.
At the same time, prices are rising. The oil price reached $115 for a barrel of Brent on Friday. The recommended retail price for a liter of petrol for the first time exceeds 2.30 euros (recommended price) per litre. That was an increase of 4 cents compared to Thursday. Never did a gasoline rise so fast in one day. A liter of diesel is now more expensive than 2 euros.
gas price
The European gas price touched the price of 213.90 euros per megawatt hour on Friday. Day after day on the gas market, records are being broken this week amid fears that the war in Ukraine will jeopardize gas supplies in Europe. Trading is also very volatile, sometimes the price goes up and down in a short period of time. Gas prices have more than doubled since the beginning of the war. But before that, gas prices had exploded, translating into more expensive electricity for consumers. Some gas companies even went bankrupt.
Many other products, such as grain, are quickly becoming more expensive. This means that flour products in the shops will rise in price. Dutch consumers may still have that, but the inhabitants of a country like Egypt, which depends on Russia and Ukraine for 90 percent of their grain imports, are in serious trouble. They spend half of their income on grain products.
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