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Market summary

VIEWS: 32 PAGES: 6

									Market summary                                                                January – December 2004
                    Turnover on ICEX during 2004 totalled ISK 2,218 billion (bn) and has never been
                     greater. This figure represents a 41% YoY increase in turnover (ISK 1,577 billion).
                    Five months of last year had total turnover exceeding ISK 200 bn, with December the
                     peak month at ISK 250 bn.
                    The highest quarterly turnover ever, ISK 702 bn, was recorded in Q4 of 2004 and
                     eight of the ten days with highest trading ever occurred in 2004. The record for
                     highest turnover in a single day, ISK 37.4 bn, was set on 30 September.
                    Equity turnover during the year amounted to ISK 721 bn, which is a YoY increase of
                     30%, while trading in bonds and bills amounted to ISK 1,496 bn, an increase of 46%
                     on the previous year.
                    Trading in Exchange Traded Funds (ETFs) began in mid-December, when the fund
                     ICEQ was listed.
                    The ICEX-15 index reached new heights during 2004, when it closed at 3,947.33 on 8
                     October. The index closed at 3,359.6 on December 30, increasing by 58.9% during
                     the year.
                    No company listed its shares on the market during the past year while shares of
                     fourteen companies were delisted. Despite the delistings, the market value of listed
                     securities rose by 64%.
                    ICEX members were 20 at year-end, including two foreign members.

                    Annual turnover – 1996-2004
                  2,500




                  2,000




                  1,500
    ISK billion




                  1,000




                   500




                     0
                          1996     1997     1998     1999     2000     2001     2002     2003     2004




  Thordur Fridjonsson, President and CEO of ICEX: “Market developments this past year give
  reason for considerable satisfaction. Turnover grew substantially on both equity and bond
  markets. Share prices rose more than in most countries, market efficiency has increased and a
  number of innovations were introduced. In addition, companies used the market to good
  advantage in raising capital to invest in new undertakings. Companies listed on ICEX, for
  instance, raised around ISK 170 bn this past year on the market. In absolute terms, this
  represents more new capital than on either the Norwegian or Danish markets. The amount
  corresponds to 16% of the market value of listed companies, while on most other European
  exchanges the comparable figure is 1-3%. Companies used this capital in particular for
  investment to expand abroad and in fact this major expansion by Icelandic companies was a
  leading characteristic of the year 2004.”

  January 2005                                                                                           1
   Equities
                 Equity turnover for the year amounted to ISK 721 bn, the highest ever on
                  ICEX, and a 30% YoY increase.
                 Total Q4 turnover was ISK 256 bn, breaking the previous quarterly record of
                  ISK 180 bn set in Q3.
                 The year’s highest monthly turnover was in September, ISK 99 bn, which is
                  also the highest monthly turnover ever.
                 Turnover on 30 September amounted to ISK 33.8 bn, the highest ever on a
                  single day. Trading in shares of Islandsbanki amounted to just over ISK 30 bn.
                 Average daily equity turnover for 2004 was ISK 2.9 bn, as compared to ISK
                  2.3 bn in 2003.
                 Share turnover velocity was 77% during the year, as compared to 95% the
                  previous year.
                 Of this, on-exchange trading comprised 26.6%, as compared with 16.4% in
                  2003 and 20.3% the year before that. On-exchange turnover increased by
                  111% from the previous year.

                 Monthly turnover and closing value of ICEX-15

                 120                                                                                                                                                                                                                               4,000

                 100                                                                                                                                                                                                                               3,500

                 80                                                                                                                                                                                                                                3,000
   ISK billion




                 60                                                                                                                                                                                                                                2,500

                 40                                                                                                                                                                                                                                2,000

                 20                                                                                                                                                                                                                                1,500

                  0                                                                                                                                                                                                                                1,000
                       Jan-03
                                Feb-03
                                         Mar-03
                                                  Apr-03
                                                           May-03
                                                                    Jun-03
                                                                             Jul-03
                                                                                      Aug-03
                                                                                               Sep-03
                                                                                                        Oct-03
                                                                                                                 Nov-03
                                                                                                                          Dec-03
                                                                                                                                   Jan-04
                                                                                                                                            Feb-04
                                                                                                                                                     Mar-04
                                                                                                                                                              Apr-04
                                                                                                                                                                       May-04
                                                                                                                                                                                Jun-04
                                                                                                                                                                                         Jul-04
                                                                                                                                                                                                  Aug-04
                                                                                                                                                                                                           Sep-04
                                                                                                                                                                                                                    Oct-04
                                                                                                                                                                                                                             Nov-04
                                                                                                                                                                                                                                      Dec-04




                                                                                               Turnover                              ICEX-15



                 No new companies were listed on ICEX in 2004.
                 Delistings in 2004:
                  13.2.2004           Eskja hf.
                  31.3.2004           Hradfrystihusid-Gunnvor hf.
                  2.4.2004            Thorbjorn Fiskanes hf.
                  15.4.2004           Vaki-DNG hf.
                  11.6.2004           Gudmundur Runolfsson hf.
                  11.6.2004           Hlutabrefamarkadurinn hf.
                  2.7.2004            Lif hf.

January 2005                                                                                                                                                                                                                                   2
         29.7.2004           Staltak hf.
         8.10.2004           Afl fjarfestingarfelag hf.
         12.10.2004          Sildarvinnslan hf.
         11.11.2004          Saeplast hf.
         19.11.2004          Kaldbakur hf.
         22.12.2004          Vatryggingafelag Islands hf.
         29.12.2004          Hlutabrefasjodur Bunadarbankans hf.
        Shares in Opin Kerfi Group hf. were delisted on 4 January 2005, as Kogun had
         acquired control of the company. Shares in Tangi hf. have been placed on the
         Observation List due to its proposed merger with other companies and shares
         of Hradfrystistod Thorshafnar are on the Observation List after a take-over
         obligation arose.
        At the end of the year shares in 34 companies were listed, four of them on the
         ICEX Alternative Market.
        The total market value of listed equities at the end of December was ISK 1,084
         bn, as compared with ISK 659 bn at the end of last year. This is an increase of
         64%.
        As in the previous year, shares in Islandsbanki were the most-traded shares on
         ICEX, with a turnover of ISK 141 bn during 2004. In on-exchange trading,
         shares in Kaupthing Bank were the most traded shares, with a turnover of ISK
         41 bn, which represents 33% of total trading in the company’s shares.
        About 81% of trading can be attributed to the ten most actively traded shares.

        Ten most-traded shares in 2004

                                        Turnover         % of      Cumulative       Proportion      Price            Price (1)
                                                                                     on-exch.
                                           ISK          total      turnover %:        trading    30.12.2004         30.12.2003
 Islandsbanki hf.                            140.7      19.5%           19.5%            17.6%          11.2               6.16
 Kaupthing Bank                              122.3      17.0%           36.5%            33.3%           442            216.08
 Burdaras hf.                                 68.2       9.5%           45.9%            28.7%            12               6.99
 Landsbanki Islands hf.                       61.0       8.4%           54.4%            38.5%          12.1               5.72
 Actavis Group hf.                            49.3       6.8%           61.2%            50.0%          38.7             41.81
 Straumur Fjarfestingarbanki hf.              49.1       6.8%           68.0%            23.5%          9.55               4.67
 Ossur hf.                                    26.1       3.6%           71.6%            43.9%            76               43.6
 Bakkavor Group hf.                           24.7       3.4%           75.0%            44.3%          24.2               18.3
 Icelandair                                   22.3       3.1%           78.1%             5.7%          9.85               6.01
 Kaldbakur hf.                                22.2       3.1%           81.2%             3.6%            (2)              4.32
    (1) Price 30.12.2003 adjusted for dividends, splits and rights issues in 2004
    (2) Delisted 19.11.2004. The closing price on the day of delisting was 7.55


        At the end of 2004, the ICEX-15 index stood at 3,359.6, after closing at a
         record high of 3,947.33 on 8 October. The ICEX-15 index rose 58.9% during
         the year while the Main List index increased by 52.9%.
        Two sector indices, Services and Commerce and Pharmaceuticals, fell during
         the year by 2.8% and 7.2% respectively. It should be pointed out that both of
         these indices are comprised of a single company.
        The sector index which rose the most during 2004 was the Building and
         Construction index (by 103.0%), but this index also includes only one


January 2005                                                                                                    3
       company. This was followed by the Finance and Insurance index, which rose
       by 88.9%, and the Investment Companies index, with an increase of 79.8%.
      ICEX began calculating total return versions of the ICEX Main List and the
       ICEX-15 indices. The indices were not calculated retroactively and the time
       series only go back as far as 20 February 2004.

      Sector indices

                                               Value            Change (%)             % of
                                                                                      market
                                             30.12.2004      12 mos.      24 mos.     value
    Fisheries                                     120.65         20.7%     12.4%        7.9%
    Services and Commerce                         172.96         -2.8%     12.9%        0.1%
    Finance and Insurance                         476.89         88.9%    190.3%       54.2%
    Transport                                     229.07         64.3%     92.8%        8.5%
    Industry and Manufacturing                    246.57         42.7%     72.7%        7.6%
    Building and Construction                     514.41        103.0%    189.8%        0.7%
    Information Technology                         98.15         31.4%     51.7%        8.7%
    Pharmaceuticals                              1179.32         -7.2%    154.6%       10.7%
    Investment Companies                          217.27         79.8%    133.0%        1.6%

      Members’ share in equity trading – Top 5

       Percentage of volume at market value during 2004
        Total turnover                 %        On-exchange trading                 %
        Landsbanki                    34.0      Kaupthing Bank                      35.5
        Kaupthing Bank                32.7      Landsbanki                          21.3
        Islandsbanki                  15.6      Islandsbanki                        17.6
        Straumur Fjarfestingarbanki    8.8      Straumur Fjarfestingarbanki           7.8
        MP Fjarfestingarbanki          1.9      Sparsjodur Hafnarfjardar              5.2




January 2005                                                                                4
 Bonds and bills


                Total turnover in bonds and bills during the year amounted to ISK 1,496 bn, of
                 which ISK 446 bn was traded during Q4, making this the highest quarterly
                 turnover ever.
                The YoY turnover increase is 46%.
                Average daily turnover was ISK 6.0 bn as compared to ISK 4.2 bn in 2003.
                On-exchange trading was around 52% as compared to 60% the previous year.
                Trading in Faroese bonds listed on ICEX amounted to just under ISK 3.7 bn.

                Turnover of bonds and bills by quarter 2002-2004


                 500

                 450

                 400

                 350

                 300
   ISK billion




                 250

                 200

                 150

                 100

                 50

                  0
                        01-    02-    03-    04-    01-    02-    03-    04-    01-    02-    03-    04-
                       2002   2002   2002   2002   2003   2003   2003   2003   2004   2004   2004   2004

                                     On-exchange                  Off-exchange



                Turnover by type of instrument

                                        2004                               2003
                                         Q4 Q3       Q2       Q1            Q4  Q3      Q2       Q1
         Bank bills                      15.29.7       9.5     8.6           9.512.1    11.9     18.0
         Housing bonds (IBH)              1.58.2 191.4 165.7                   152.6 121.9 115.1
                                                                           117.0
         HFF and housing
         authority bonds (IBN)       283.7 202.0     54.7     61.7       29.3   33.7    38.7     41.4
         T-notes (RIKB)               81.4  68.3     69.7     49.7       31.4   33.2    41.7     43.5
         T-bills                      31.3  21.4     15.8     16.0       17.8   22.3    22.6     17.1
         T-bonds (RIKS)               25.9  18.9     29.8     33.1       11.5   20.9    21.0     24.9
         Other long-term bonds         6.8   6.9       5.0     4.0        4.4    3.3     3.6      3.7
         *Housing authority bonds (IBN) only until the end of Q2 of 2004, HFF bonds primarily during
         the latter half of the year



January 2005                                                                                               5
      The longest HFF bond, HFF150644, recorded the highest turnover for a single
       instrument, or ISK 253 bn.
      About 78% of bond trading involved the 10 most-traded classes.
      The total market value of listed bonds and bills at year end was ISK 953 bn,
       23% higher than a year earlier (773). Bonds issued by the HFF account for
       about 53% of the market value and government bonds and bills around 12%.
      The three new Housing Financing Fund (HFF) bonds, listed in July, all rank
       among the 5 most traded bonds in 2004. The yield on indexed bonds fell in
       2004 which can in part be attributed to the new HFF bonds and increased
       competition in the provision of housing loans. In 2004 the Central Bank raised
       its repo rate by 2.95 percentage points which raised yields on shorter non-
       indexed bonds.

      Ten most-traded bonds in 2004

                        Turnover      % of        Cumula-    % on-exch.
                         ISK bn       total        tive %     trading         Yield
                                                                               30/09/04    30/12/03
    HFF150644                 253.3   16.9%         16.9%          34.8%            3.50          –
    IBH 41 0315               172.8   11.5%         28.5%          36.9%            4.60       4.54
    RIKB 13 0517              154.6   10.3%         38.8%          63.8%            7.39       7.88
    HFF150434                 125.2    8.4%         47.2%          40.4%            3.62          –
    HFF150224                 106.8    7.1%         54.3%          40.7%            3.63          –
    RIKS 15 1001               91.3    6.1%         60.4%          83.8%            3.61       4.29
    IBH 37 1215                75.8    5.1%         65.5%          53.8%            4.60       4.53
    IBN 38 0101                73.8    4.9%         70.4%          51.8%            3.94       4.28
    RIKB 07 0209               70.2    4.7%         75.1%          73.2%            8.10       7.51
    IBH 26 0315                46.9    3.1%         78.2%          59.3%            4.65       4.59

      Members’ s share in trading bonds and bills - Top 5

       Percentage of volume at market value during 2004
    Total volume                          %             On-exchange trading                  %
    Kaupthing Bank                         28.6         Kaupthing Bank                        26.5
    Islandsbanki                           27.2         Islandsbanki                          21.2
    Landsbanki                             23.0         Landsbanki                            20.5
    Sparisjodabanki Islands                 5.5         Sparisjodabanki Islands                9.2
    MP Fjarfestingarbanki                   4.2         Sparisjodur Reykjav. og nagr.          6.8




January 2005                                                                                   6

								
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