Investing in Iceland‘s growth
Most investors investing in the stock market like good growth stories. And, while many take a more of a visionary look at particular investment opportunities, nobody likes losing money. What we do know is that companies will be founded and some of them will grow to be great. The question is how they get there. The Nasdaq Iceland market is re-establishing itself after the financial collapse with a variety of home grown companies, that generally have sturdy dividend policies. These companies have served investors well in the past years, with the OMXI8 benchmark Index rising 43% in 2015 (49% dividend adjusted) and the All-share index 38% over the same period. This process in getting the market on its feet again through the listing of established domestic industry leaders has been pivotal for its growth and increased trust.
The market is now moving into a different phase. In recent years, new listings have been due to the banks selling off their ownership in companies they acquired in the wake of the collapse, but in the coming months and years more companies will enter the market for their own reasons. The financial collapse sparked off quite the innovative spirit in Icelandic entrepreneurs, and we have seen incredible and innovative ideas turned into enterprises with real potential for increased growth and new conquests. For these companies, until now, the choice of using the equity market for growth has not been much of a reality. Even though overseas investors can enter the market with new investments, and more importantly, exit again, the capital controls have put restraints on companies in using their newly acquired capital to grow abroad. However, recent news on lifting of the capital controls gives reason to believe that this may be about to change. Here is where the Nasdaq First North market comes to play, the alternative market option for smaller companies to grow. The experience of the Nasdaq First North Sweden market inspires. There, growth companies have flocked to the market in recent years with good success. From what we can see in Icelandic industries, there is great potential for many innovative companies to do just the same. Nasdaq Iceland has been promoting this opportunity for smaller growth companies and investors in the past years and finally we may be seeing a paradigm shift in looking at this option. Nasdaq Iceland‘s efforts have focused on easing these companies‘ path to the market and we are optimistic that there will be an increased appetite for Nasdaq First North. Companies, advisors, investors, as well as the authorities have expressed their interest in building up a solid market for growth companies, be it for boosting economic growth or increased and diverse investment options. The only question now seems to be; who is going to be the first to get the ball rolling?
