Wiped out Icelandic bourse eyes eventual comeback

By Patrick Lannin

REYKJAVIK (Reuters) - Iceland's stock exchange has lost 80 percent of its value in the country's crisis, but the head of the bourse said on Friday he saw the market contributing to parent Nasdaq OMX's profits again in two years.

The Icelandic market capitalisation has been all but wiped out after the collapse of the island's three largest banks, which accounted for the lion's share of the bourse.

"Market value was equal to 120 percent of GDP (gross domestic product), now it is down to 25 percent," Thordur Fridjonsson, head of Icelandic Markets for Nasdaq OMX, told Reuters. "This is a major blow to the stock exchange."

He said the market would try to rebuild from the remaining base of companies and the fixed income market after the collapse of Kaupthing Bank, Glitnir and Landsbanki.

"This will be the base for a kind of new beginning for the stock market in Iceland," he said, adding that Nasdaq OMX chief executive Robert Greifeld had been supportive.

"In profits and revenue generation there will be a very significant impact for 2009, but our scenario and expectation is that we will be able to deliver the similar kind of results for 2010 as for this year," he said.

Nasdaq OMX does not break out separate figures for its subsidiaries. Fridjonsson said he hoped market capitalisation would be back to 100 percent of Icelandic GDP in two years.

The benchmark index, the OMXI15, includes companies such as Marel Food Systems, Bakkavor, Icelandair and Ossur.