GLOBAL INVESTING
Bright ideas used to get you nowhere in Europe. Stock markets were sluggish, junk bonds nonexistent, and venture capitalists few and far between. Now, young companies looking for a big break have found hope in the form of two new stock markets: Easdaq, a Brussels-based electronic market modeled after Nasdaq, and the larger EURO.NM, a loose alliance of the growth-oriented "new markets" established by the German, French, Dutch, and Belgian stock exchanges.
A move to privatize pension plans, as well as a general hunger to emulate American markets, has brought a flood of money into the new exchanges, lifting them to remarkable heights. The EURO.NM All Share Index and the Easdaq All Share Index have more than doubled since late December – pretty impressive, even when compared with the Dow Jones-sponsored blue-chip Euro STOXX 50 Index's robust 37 percent ascent over the same period. Some individual stocks have blazed away: The share price of German merchandising specialist EM.TV, for example, has risen more than twentyfold since its October 1997 IPO.
Stateside, the SEC has yet to allow the new markets to set up shop, so info on the stocks is hard to come by. But there's nothing to stop you from buying in. You'll simply have to do your own research before persuading your full-service broker to get the shares you want. (Most US brokers will be new-market newbies.)
If you want someone else to do the hard work, you can play the trend through several mutual funds specializing in Euro-pean growth stocks. Leading the pack so far this year, accord-ing to Standard & Poor's Micropal, is AIM Funds's European Development Fund (AEDAX), up 44 percent since January.
Some analysts argue that these valuations reflect a bubble about to burst. Others say the good times are just starting to roll. Nasdaq, the grandfather of all growth markets, is working toward an alliance with Deutsche Börse (whose Neuer Markt carries more than one-third of EURO.NM's 100-plus recent listings). And when the Euro arrives next year, the European Union's big money will be free to roam the entire EU in search of good stories. A lot of bright young companies will be ready to oblige.
[an error occurred while processing this directive] Easdaq: www.easdaq.be/; EURO.NM: www.euronm.com/; AIM Funds: (800) 347 4246. [an error occurred while processing this directive]
| NEW MONEY
| Continental Shift
