It is expected that many new companies will register at the stock exchange in Iceland this year. The market value of the shares registered is estimated to be around 70 bn ISK, or around 450 million EUR. This would mean a 35-40% expansion of the Icelandic stock market.
Hrafn Steinarsson, economist at the research department in Arion Bank talked about this. He says that there is still high demand for stocks, and that this demand is mostly coming from pension funds and investment funds. Iceland is still locked behind capital controls so investing abroad is very difficult, and in most cases impossible.
The research department estimates that net payments into the Icelandic pension funds, net of current pension payments, will be around 40 bn ISK this year. The pension funds will have to invest this money inside the country. If the stock market expands by 70 bn ISK it might happen that investors will sell government bonds and invest in the stock market. It was also mentioned that corporate bonds would gain popularity this year.