Investment Potential in Iceland
The capital markets have helped many investors – small, mid cap or large institutional investors make a lot of money over the last few years. Plenty of markets around the world have done well and rising economies have given the best returns and certain South American markets and also Asian markets like India, China, and Singapore have all done well in the recent past.
Iceland is no exception to the recent global trends and has emerged as an interesting and viable investment destination providing a range of attractive investment opportunities for international investors from all over the globe.
Whether you are looking at investing in funds, stocks, bonds or foreign exchange, Iceland can offer all kinds of investment opportunities. Icelandic banks like Kaupthing Bank, which is the biggest bank in Iceland, offer their customers the full range of investment products.
One of the main reasons why international investors are noticing Iceland as one of their investment markets is because of the financial and economical stability that the Island country enjoys. Iceland is actually the smallest country in the world to have its own currency and floating exchange rate. Iceland is also considered as a modern economy having excellent institutions and at the same time has extremely low corruption; it maintains a good rule of law, provides higher education and has complete freedom of the press – a combination which many economies around the world cannot match.
Iceland is actually ranked as Europe’s most competitive economy. The key sectors for investing in Iceland are Information Technology and Telecomm, Life Sciences, Creative Industries, Energy and Finance.
According to an article published by Dr. Asgeir Jonsson who is the Chief Economist of Kaupthing Bank, Iceland which is titled “The Icelandic Economic Miracle – Where does the money come from? – The Normalization or Europeanization of Iceland” – the GDP of Iceland has grown 50% in real terms since 1995. According to Dr. Asgeir Jonsson, Iceland’s success during the past years has six distinct roots. They are:
- Very strong growth fundamentals
- Free market reforms paying off
- European Integration
- A fully funded pension system
- Low world market price on capital
- Scale economies & Investment banking
The Iceland Bond market offers one of the best investment opportunities in Iceland. The bond market represents 33% of the total market value of the securities listed on the stock exchange in 2006 and around 50% of the turnover. The bond market consists both of primary and a secondary trading. The primary stock market generally takes the form of bond auctions, while the secondary market is mainly operated on the Iceland Stock Exchange (ICEX), which serves the needs of both parts of the market. Issues and sales of bonds on the market have been built up in such a way as to serve both borrowers and investors.
More and more investors around the world are all of a sudden waking up to the major investment opportunities that Iceland has to offer. In fact according to the report by Frederic S. Mishkin and his co- author Tryggvi T. Herberrtsson “Iceland has a strong fiscal position that is far superior to what is seen in the United States, Japan and Europe”
In the years to come Iceland could develop in to one of the premier investment destination of the world and probably the most preferred investment hub in Europe.
Dagur Jonsson is the CEO of Libius Inc a company which provides an internet
appropriation service to companies in the corporate banking sector like
Kaupthing Bank, www.kaupthing.com.
Article Source: ArticlesBase.com - Investment Potential in Iceland