{"id":110545,"date":"2020-03-10T15:07:21","date_gmt":"2020-03-10T14:07:21","guid":{"rendered":"https:\/\/www.erasmusmagazine.nl\/en\/?p=110545"},"modified":"2025-12-19T11:24:44","modified_gmt":"2025-12-19T10:24:44","slug":"falling-stock-markets-but-our-investment-society-br-beurs-is-doing-fine","status":"publish","type":"post","link":"https:\/\/www.erasmusmagazine.nl\/en\/2020\/03\/10\/falling-stock-markets-but-our-investment-society-br-beurs-is-doing-fine\/","title":{"rendered":"Falling stock markets, but our investment society B&R Beurs is doing fine"},"content":{"rendered":"

The plunging stock markets are the focus of attention at B&R Beurs, the investment society at Erasmus University. \u201cIt\u2019s a good thing we\u2019re experiencing it now!\u201d, laughs Alain Faddegon (22), board member. \u201cStock markets don\u2019t often fall so fast, but if you want to become an investor, you need to know what to do. Luckily that\u2019s what we\u2019re practising now.\u201d<\/p>\n

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In the app groups of the various fraternities in the association, there was a lot of activity this morning, Alain confirms. At the start of the academic year, each fraternity buys a package of shares, for between 200 and 400 euros per person. During a nine-month competition, the students see which fraternity is best at trading shares. Over the past few weeks, the stock markets had been falling due to coronavirus, but this morning things accelerated fast. \u201cWe\u2019ve gone down a lot of points! Which is obviously all related to \u2018OPEC\u2019.\u201d<\/p>\n

OPEC? Yes. OPEC (the Oganisation of the Petroleum Exporting Countries). Mary Pieterse-Bloem, endowed professor at Erasmus School of Economics (ESE) and\u00a0<\/em>global head fixed-income\u00a0at ABN-Amro, explains: \u201cOn Friday it was announced that Russia rejected agreements within OPEC to cut production and thus keep prices stable, which was what Saudi Arabia was pushing for.\u201d<\/p>\n

'We\u2019re throwing all our oil on the market\u2019<\/h2>
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Alain Faddegon, board member B&R Beurs<\/span><\/p>

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\u201cSaudi Arabia produces so much oil that they can usually singlehandedly keep oil prices stable by adjusting the production. Now they want other countries to help so that they aren\u2019t the only ones doing this. Falling oil prices caused by coronavirus is the reason for the situation. But Russia \u2013 which has a weak market position \u2013 doesn\u2019t want to cooperate. So Saudi Arabia is saying: \u2018We\u2019re going to throw all our oil on the market if you don\u2019t help\u2019, which will cause oil prices to fall even faster. That will create considerable unrest on the market,\u201d says Pieterse-Bloem. \u201cPeople just want to get rid of shares at the moment.\u201d<\/p>\n

But student and B&R board member Alain is not one of them. He and some of his fellow members \u2013 \u2018not every fraternity was on top of the situation\u2019 \u2013 had already predicted that the stock markets would (partially) crash. \u201cWe conducted extensive research into coronavirus. We compared it with other viruses and studied their influence on the market. In our view, this analysis showed that coronavirus would cause significant problems, so we sold our shares in mid-February. Then OPEC came along \u2013 even though we obviously couldn\u2019t have predicted that.\u201d<\/p>\n

Coronavirus is annoying for the B&R board because they are having to cancel events, but it\u2019s an interesting time. \u201cIt\u2019s amazing to experience this. In the time that I\u2019ve been a member of the association, shares have continued to rise. But now we can also learn \u2013 many of us want to work in the financial sector \u2013 from a bad market. Very different emotions and market forces suddenly play a role,\u201d says Alain.<\/p>\n

'I\u2019m sure things will bounce back'<\/h2>

And so they learn lessons for the longer term. \u201cThe nice thing is: next week we have a lecture by APG, the pension provider of ABP, about how to invest in \u2018fixed income\u2019, or government and corporate bonds. APG is mainly going to talk about government bonds. They are now rising in value, because investing in government bonds is safer. So it\u2019s perfect timing to talk to them in these uncertain times on the market.\u201d<\/p>\n

Faddegon \u2013 student of International Business Administration (IBA) \u2013 also wants to work in finance. What does he like about it? \u201cThe competitive element. You can become completely absorbed in finding out how the stocks will develop, exploring the influence of certain developments on the market, and ultimately everything changes very fast and you need to ensure that you respond in the best way possible.\u201d<\/p>\n

So are we heading for a crisis similar to that in 2008? Pieterse-Bloem doesn\u2019t see things so pessimistically. \u201cI think it\u2019s a temporary phenomenon; I\u2019m sure things will bounce back. Although with coronavirus and OPEC, it feels a bit like being in a thunderstorm that doesn\u2019t pass over.\u201d<\/p>\n\n\t

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De redactie<\/h2>\n\t\t\n\t\t
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