Iceland review - 2013, Page 99

intermediaries in the
investment Programme:
Arctica Finance hf.
Arion Bank hf.
Auður Capital hf.
HF verðbréf hf.
Icelandic Securities hf.
Íslandsbanki hf.
Landsbankinn hf.
MP Bank hf.
Straumur Investment Bank hf.
virðing hf.
Primary dealers:
Arion Bank hf.
Íslandsbanki hf.
Landsbankinn hf.
MP Bank hf.
Straumur fjárfestingabanki hf.
commercial banks:
Arion Bank hf.
Íslandsbanki hf.
Landsbankinn hf.
MP Bank hf.

Invest
In Iceland
Source: Central Bank of Iceland
percent of the capital inflow of the investment
program has been invested in bonds, around 43
percent in equities, 12 percent in real estate and
around 1 percent in UCITS (Chart 2). A breakdown
of investors taking part in the auctions between
residents and non-residents shows that domes-
tic investors account for 37 percent of the total
amount and non-residents for 63 percent. In this
analysis, foreign companies owned by Icelandic
residents were classified as domestic investors.
An additional 12 auctions have been held invit-
ing bids from parties wishing to sell their króna
assets in exchange for FX which is exempt from
repatriation obligations. In 2011 two such auctions
were held where the exchange rate was ISK 210
per euro. The price held fairly steady in 2012 at
around ISK 240 per euro, but has since decreased
in 2013 and in the latest auction in April this year
the auction price was ISK 210 per euro (Chart 3).
In the 12 auctions a total of ISK 281 billion have
been offered for sale, of which the Central Bank
has purchased around ISK 90 billion (Chart 4). The
price expectations of those parties offering their
króna assets for sale are not always in line with the
price expectations of investors taking advantage
of the FX auctions to make long-term investments
in Iceland.
Commercial banks act as intermediaries for
the purchase of Icelandic krónur in exchange for
foreign currency while specified primary dealers
in the bond market act as intermediaries in the
auction involving payment in Treasury bonds.
Minimum amount for participation in the Treasury
bond auction is EUR 10,000. Financial institutions
that have concluded a collaboration agreement
with the Central Bank of Iceland may act as inter-
mediaries and will handle investors’ applications
for proposed participation in the auction accord-
ing to the Investment Programme. The auction
is open to investors whose applications for par-
ticipation in the Investment Programme have been
approved. Minimum amount for participation in the
Investment Programme auction is EUR 25,000. A
list of these parties with further information regard-
ing the auctions can be found on the Central Bank
of Iceland website – www.sedlabanki.is