The Euronext is a European stock exchange that combines seven national markets in Europe with a presence in Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo, and Paris. Like other stock exchanges, the Euronext offers cash and derivative markets, listing market data, custody and settlement services, and other market solutions. It also houses over 600 national indices, including the AEX, BEL 20, CAC 40, OBX, PSI 20, and ISEQ 20, and also created the Euronext CAC 40 ESG Index.
As of June 2021, the stock exchange is one of the largest in Europe with 1,900 issues. These issues represent €6 trillion market funding. It also has about 350 trading members and over 6,000 global investors.
History of the Euronext
The Euronext was founded in 2000 as a blend between the Amsterdam Stock Exchange, Brussels Stock Exchange, and Paris Bourse. After the European Union was formed, the stock exchanges opted to combine. This was done to get the most from the newly joined financial markets of the common area. The stock exchange went public for the first time in 2001 through an initial public offering (IPO).
In 2001 and 2002, the Euronext added the London International Financial Futures and Options Exchange (LIFFE) and the Portuguese stock exchange, known as the Bolsa de Valores de Lisboa e Porto (BVLP). This move made it one of the world’s largest stock exchanges. These events made the stock exchange pleasing to global stock exchanges that were looking to expand or build up their presence in the European markets.
In 2006, the NASDAQ moved to acquire the London Stock Exchange (LSE), which prompted the NYSE Group to pursue the Euronext. The Deutsche Borse, Germany’s stock market, tried to outbid the NYSE Group, but it failed. The merger took place in April 2007. The Deutsche Borse tried to merge with the NYSE Euronext two more times, but the exchange was acquired by the Intercontinental Exchange in 2013.
The Intercontinental Exchange decided to pursue an IPO of the NYSE Euronext. The split was made in June 2014. The Euronext eventually traded on its own on the New York Stock Exchange under the new ticker symbol ENX.
Why Invest in the Euronext
The Euronext is one the largest stock exchanges in not only Europe but in the world. This makes it a place where people want to invest their money. This is the climate that has led to merger and acquisition interest on the part of other stock exchanges in the past, since stock exchanges tend to realize large economies of scale and entering new markets is hard from a regulatory standpoint.
Euronext has a market capitalization of about €9.6 billion. As of June 2021, it made €1,364 million in revenue. It also has 70.4% cash equity market share, a reported 58.8% EBITDA margin, and has offices in over 20 countries. Euronext earned an S&P rating of BBB, showing a stable outlook. You can learn more about investing in Euronext by visiting its investor's page.
Along with investing in the stock exchange, you may want to think about putting your money into one of the many indexes that are part of the exchange. These indexes provide unique exposure to several national equity markets, including those in Amsterdam, France, Portugal, and London. People looking to get into these markets may want to look at exchange-traded funds (ETFs) backed by these major indexes—or many of its other indexes.
You should also be aware of the risks that come along with investing in the Euronext and its indices. The stock exchange is reliant on the health of the Eurozone and European Union economies. A downturn in these areas could have an adverse impact on trading action and earnings for Euronext. A downturn could also impact the value of companies listed on the exchange and the indices that are made up of these equities.