Other firms that have been mentioned in this context are TM and Eimskip, both of which have announced plans for listing; the real estate firms Reginn and Reitir, insurance firms VíS and Sjóvá; and the oil company Skeljungur. Some of them will probably manage to complete preparation for listing later this year or in 2013, adding to domestic stock market offerings. The supply of shares available will depend on how large a stake is sold, as the Nasdaq OMXI exchange requires that 25% of a listed company's shares be owned by general investors.


Decline in residential leases

Weak participation in April Treasury bill auction
Participation was poor in GDM's April Treasury bill auction, not least in view of the fact that bills amounting to ISK 14 bn nominal value are scheduled to mature during the month. Bids submitted for the two series on offer totalled just over ISK 5.8 bn, not even half the amount of the upcoming maturity. At this auction, demand was more or less equally distributed between the two bills, although interest has generally been concentrated in the shorter maturity ever since GDM began issuing three- and six-month bills simultaneously. Bids for the three-month bills totalled ISK 2.98 bn, with only ISK 850 million accepted at a flat rate of 3.20%. Bids for the six-month bills totalled ISK 2.85 bn, with ISK 1.25 bn accepted at a flat rate of 3.50%.

Treasury borrowing terms deteriorate
The Treasury's borrowing terms for both three- and six-month bills deteriorated sharply between the March and April auctions. In March, the flat rate on the three-month bills was 2.80%, some 40 bp lower than in April. Interest rates have not been this high since the November Treasury bill auction. The same is true of the longer bills: in March, the flat rate on the six-month bills was 3.30%, a full 20 bp below the April rate. This cannot be traced back to bond market developments, as the closing yield on RIKB13 was 4.2% the day before the April Treasury bill auction and 4.3% the day before the March auction. The Central Bank of Iceland (CBI) Monetary Policy Committee's (MPC) decision to raise interest rates by 25 basis points in the interim may have had some effect, however. At yesterday's close, the yield on RIKB13 was 4.3%, broadly the same as just before the last auction, and the CBI's policy rate is the same.

Low Treasury bill balance
Treasury bills maturing in May amount to ISK 18 bn, which indicates that participation in Friday's auction will be strong. The Treasury bill stock declined by ISK 12 bn in April, or from ISK 50.4 bn to ISK 38.5 bn, the lowest since GDM began issuing Treasury bonds again after the collapse of the banks. It is also considerably below GDM's year-end 2012 target of ISK 45 bn.