Rising and falling on the stock market

Mary Pieterse-Bloem, Professor of Financial Markets at Erasmus School of Economics was part of BNR Nieuwradio's investors panel. Here, she discussed the new Digital Market Act and certain situations currently visible on the stock market.

Digital market act

The European Union has introduced a new law: the Digital Market Act, which bans corporate steering. This is a remarkable action by the European commission from the European Union towards big tech companies such as Apple, Alphabet and Meta. These companies did steer companies and therefore they have been sued by the European Union for heavy fines. The actual investigation has only just started, so this case will have a long tail, is Pieterse-Bloem's prediction. She finds the persistence of the European Union to accomplish this kind of competition law with these companies remarkable. Europe currently remains a forerunner in this compared to other powerful continents. 

Stock market

Douglas had a distressed IPO as they needed to get rid of debt and restructure. Before the IPO, the value had been reduced several times, but still the IPO was a misery. The price was at the lower end of what the company vnod, but at the upper end to how investors looked at the company. According to Pieterse-Bloem, this also has to do with the unattractiveness of the retail sector, as tech sectors are doing much better at the moment. Withdrawing from the stock market at the last minute would not have been a solution either, this would probably also have caused a lot of damage to the company. 

One company doing better again on the IPO is Truth Social, the media platform created by Donald Trump after he was banned from Twitter following the storming of the capitol. According to Washington Post, Trump himself spread more than 30,000 lies during the election campaign. As a result, Pieterse-Bloem finds it remarkable that his social media platform has been given that name. A lot of investors are stepping in now, though. However, this gives no short-term advantage to Trump, as he has to leave the shares for at least six months.

Nxchange, a mini exchange, has received a 2022 designation from the Financial Markets Authority (AFM). This is because they allegedly fell short of money laundering controls. At other exchange companies, you have to go through many steps, but at Nxchange, you could get in much easier. AFM has made it very clear that the mini exchange is an investment firm and therefore subject to the same regulations as other companies. This action by AFM is disciplining, partly because of their timing. In fact, AFM very carefully chose not to do it yet while maintenance work was going on at this company, as it could have done a lot of damage. 

More and more private equity firms are considering going public. Private equity partners already earn enough from their regular distributions, so according to Pieterse-Bloem, at least they don't have to do it for that. Some of the benefits she mentions are about growing the business further, by being able to diversify more into different portfolios. There is also more confidence towards companies and investors. However, the IPO also brings new obligations.

Mary Pieterse-Bloem, Professor of Financial Markets at Erasmus School of Economics
More information

You can listen to the full podcast from BNR Nieuwsradio, 26 March 2024, here

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