The Stock Market of Iceland

It is well known that the Icelandic stock market suffered greatly during the 2008 crisis. After reaching its high of 3495, the OMX Iceland All-Shares Index plummeted to its low of 167 on 8 April 2009, a 95.2% drop from top to bottom. Since then the market has steadily recovered and the index currently stands at 800. Whilst this may only be a modest rise, there are also clear signs of increasing interest from international investors in this market, particularly in relation to ESG opportunities. The Swapp Agency can advise you on any questions you may have regarding local market agents.

The Icelandic market, a paradise of ESG investments

Nasdaq Iceland, formerly known as the Iceland Stock Exchange (XICE), is the country's most important securities trading market. All domestic trading in bonds, shares and investment funds takes place on the XICE. The Icelandic stock market is closely linked to other Northern European stock exchanges and is part of the NOREX alliance. This enables the cross-listing of shares from the various members. Norway, Denmark, Iceland and Sweden are part of NOREX.

The NOREX Alliance was unique in that it was the first exchange alliance to introduce a common system for equity trading and to harmonise the rules and requirements between exchanges in terms of trading and membership.

In addition, Nasdaq Iceland has introduced a common INET trading platform for the seven Nordic and Baltic stock markets, giving investors great flexibility in accessing the market of their choice with lower costs. This makes Iceland a much more accessible market than most people realise.

Nasdaq Nordic, which includes the Nasdaq Iceland Stock Exchange, has committed itself to producing a comprehensive corporate environmental, social and governance (ESG) policy. Even though the Icelandic stock market is relatively illiquid, the need for investments that cover sustainability criteria makes Iceland a desirable and untapped choice. Not only because the whole country is a leader in this area, but also because it represents an opportunity for portfolio managers seeking to realise alpha before others do. The market is still “cheap”, while the sustainability sector is growing rapidly.

Pall Hardarson, President of Nasdaq Iceland‘, said: “Iceland is currently enjoying robust economic growth, characterised by high levels of savings and investment and low inflation. As long as macroeconomic discipline is maintained, I believe we have a good chance of continued tailwinds. Despite successful IPOs in recent years, Icelandic companies have barely begun to capitalise on the market's potential as a springboard for growth.” The statements came after a decade in which capital controls and the 2008 crisis were behind us. Hardarson pointed out that only eighteen companies are listed on the stock exchange, all of which are industry leaders and at the same time act in an ESG-responsible manner.

Get in touch with Icelandic professionals

To have an extensive consultancy relating ESG investments and the Icelandic stock market, contact Swapp Agency . We are a leading group of experts in diverse fields. Our professional team will be happy to assist you throughout the process of getting to know finance professionals or companies relating to the local stock market. Regardless of the industry or sector, we are prepared to solve all your inquiries.