Investing in stocks is one of the best ways to allocate your capital. This is because stocks have a long track record of delivering value to investors. For example, people who invested in companies like Shopify, Apple, and Facebook have more than doubled their money. In this piece, we will look at the Belgium Stock Market, what it is, key companies, and how to invest in it.
- 1 Quick Facts About Belgium?
- 2 The Belgian Stock Exchange
- 3 Biggest Companies in Belgian Stock Exchange
- 4 Belgium Stock Market vs Other Markets
- 5 How to Invest in Belgium Stock Market
- 6 Direct Investing
- 7 Belgian CFDs
- 8 Benefits for Investing in Belgian Stocks
- 9 Cons of Investing in Belgium Stocks
- 10 Summary
Quick Facts About Belgium?
Belgium is a European country that has more than 11 million people and a GDP of almost $500 billion. It is the seventh biggest economy in the EU after Germany, France, Italy, Spain, Netherlands, and Poland respectively. Brussels, its capital, is the headquarters of the European Union. As a result, the Belgian economy is mostly based on services. It also has a number of big manufacturing and industrial companies.
The Belgian Stock Exchange
Like most countries, Belgium has a vibrant financial sector. Euronext Brussels is the main exchange in Belgian. The exchange allows people to invest in stocks, index futures, bonds stock futures, and stock derivatives. The Euronext Brussels exchange has 189 public companies. The Belgian 20 share index is a common index that tracks the performance of the biggest companies in the exchange. There is also the all share index that tracks the performance of all stocks listed in the exchange. The chart below shows the performance of the 20-share index in the past five years.
Biggest Companies in Belgian Stock Exchange
As mentioned, the Belgian stock market has 189 companies. As with all exchanges, these companies are of different sizes. In this part, we will look at the ten biggest companies listed in the Belgium Stock Exchange:
- Anheuser Busch Inbev. This is a beer and wines company that is valued at more than €115 billion.
- ING. This is an insurance company that is valued at more than €42 billion.
- KBC. This is a bank insurance company that is valued at more than €30.46 billion.
- UCB. This is a Belgium biopharmaceutical company that produces products in immunology and neurology. The company is valued at more than €17 billion.
- GBL. GBL is an investment holding company that provides investment solutions to institutions. It has a market value of more than €15.2 billion.
- Galapagos. This is a biotechnology company that develops small molecule medicines. It is valued at more than €14.8 billion.
- Umicore. Umicore is a global materials company that also does recycling. It is valued at more than €11 billion.
- Ageas. This is an insurance company that provides services to individuals and companies. It is valued more than €10 billion.
- Solvay. Solvay is an advanced materials and specialty chemicals company. It is valued at more than €10 billion.
Other companies in the Belgium 20 Share index are Praximus, Sofina, Argen-X, EFC, Ackermans, Warehouses de Pauw, Telenet, Cofinimmo, Barco, Aperam, and Ontex Group.
Belgium Stock Market vs Other Markets
Belgium stocks have performed reasonably well. However, their gains have continued to underperform those from the United States. The Belgium 20-share index has risen by about 12% in the past five years. This is much lower than the S&P 500, which has returned more than 60%. Germany’s DAX has risen by 20%. Still, the index has performed better than the Stoxx 50 index, which has risen by just 6% as shown below.
The index has also underperformed its peers in the past year. As shown below, the index has risen by 18% in the past 52 weeks. This is significantly lower than the gains by S&P 500, DAX, and Stoxx 50, which have all gained by 22%, 24%, and 20% respectively. Even with this underperformance, it is safe to invest in Belgium stocks as a way of diversifying your returns.
How to Invest in Belgium Stock Market
There are three main ways you can invest in the Belgium Stock market:
- Belgian ETFs.
- Direct investment
- Belgian CFDs
- Belgian ETFs
If you are in the United States, the easiest way to invest in Belgium stocks is to invest in Belgian ETFs. These are ETFs that have invested directly in Belgian stocks. The benefit of doing this is that you can invest directly from your brokerage app. The most common Belgian ETF you can invest in is the iShares MSCI Belgium ETF.
Another way of investing in Belgian stocks is to invest directly in companies. In this article, we looked at how to invest in stocks. Basically, the process is the same. You want to invest in a company that is in an industry you understand well. You also want a company that pays dividends, and one that has a good management team.
The best way to invest is to find a good broker. It will be difficult for you to invest in Belgian shares if you are a foreigner. You can find a broker at the Euronext or in your local bank. Most banks allow people to buy and sell stocks.
Another way for you to invest in Belgian stocks is to use contracts for differences (CFD). A CFD is a product that is offered by an online broker. It is meant to reflect the same price that the real stock has. Examples of online brokers that offer CFDs are: eToro, FxPro, and Interactive Brokers among others.
Benefits for Investing in Belgian Stocks
As mentioned above, investing in stocks is a very good thing. Also, we have seen that in general, Belgian stocks have not performed very well. Still, there are several reasons why should consider investing in Belgian stocks. These are:
- Diversification. If you own stocks elsewhere, you ca invest in Belgian stocks to diversify your returns.
- Safe country. Belgium is a relatively safe country. This makes it a good safe-haven country.
- Liquidity. Stocks are highly liquid. This means that you can easily exit your investment.
- Dividends. A good number of Belgian companies return money to shareholders through dividends.
Cons of Investing in Belgium Stocks
Investing in companies that are listed in Belgium is a good thing. However, there are few challenges that you will face a number of challenges when doing this.
- Market time. If you are in the US, Belgian markets will happen at night. Therefore, it will be difficult for you to participate in real time.
- Currency. Belgian stocks trade in euros. There could be challenges in currencies if your local currency is the dollar.
- Foreigners. As mentioned above, it is very difficult for foreigners to directly invest in Belgium stocks.
- Data. We have a lot of resources for American companies. This is not the case for most Belgian stocks.
- Analysts coverage. here are very few analysts coverage for stocks in Belgium.
Belgium is a country that is rarely in the headlines. Most of the headlines happen when global leaders are meeting in Brussels. The stock market is highly liquid, and as explained here, it is relatively easy to invest in the country. We recommend that you invest in companies in industries that you know well.
Crispus is a finance professional with more than a decade experience in the industry. Over the years, Crispus has written in-depth articles on leading platforms like CCN, Marketwatch, and Seeking Alpha. He also runs a Forex education and managed account company called WestEndFx.