By Niklas Magnusson
Dec. 9 (Bloomberg) -- Iceland’s benchmark index slumped after Straumur-Burdaras Investment Bank hf, the only one of Iceland’s four largest banks left standing amid the Atlantic island’s financial crisis, and Exista hf resumed trading.
The OMX Iceland ICEX 15 dropped 261.79, or 40 percent, to 398.26 as of 1:46 p.m. Icelandic time as Straumur slumped 58 percent to 2.98 kronur and financial services firm Exista plunged 97 percent to 0.12 krona. Only ten members remain on ICEX 15 index after two of the largest banks were de-listed.
Straumur and Exista were suspended from trading on Oct. 6 along with Kaupthing Bank hf, Landsbanki Islands hf and Glitnir Banki hf, the island’s three largest lenders. That week Icelandic authorities seized the three banks, which made up 76 percent of the weighting in the ICEX 15 the week before the suspension of trading, after they collapsed under the weight of their debt.
“Trading of these financial instruments was suspended in order to protect investors and the orderly functioning of the market, due to extraordinary circumstances on financial markets,” Iceland’s regulator said late yesterday as it announced Straumur and Exista would start trading again.
Landsbanki and Glitnir shares have been de-listed from the Reykjavik stock exchange and while Kaupthing Bank remains in the index, its shares are still suspended from trade.
Exista, formerly Kaupthing’s largest shareholder, reported a third-quarter net loss of 87.8 million euros ($113 million) last month after the value of its assets fell. Straumur posted a loss of 149 million euros in the period after it lost money on trading and loans. The company said on Dec. 5 it secured 133 million euros in financing, making the investment bank “confident” it could meet all future obligations.
To contact the reporter on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net.
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