The business volume of Landsbankinn Asset Management grew in 2018. Landsbankinn held a 20% total share in a securities market where eight parties compete.
Landsbankinn emphasises having a wide product selection on offer to ensure that all customers can find an option that suits their needs and circumstances. The Bank’s selection of foreign investment objectives is no exception. Landsbréf hf., a subsidiary of the Bank, offers investment in foreign UCITS and Landsbankinn partners with several well-known overseas fund management companies. The Bank’s partners include AllianceBernstein, BlackRock, Carnegie Funds, T. Rowe Price Funds, UBS and Axa Investment.
In 2018, Landsbankinn concluded a partnership agreement with international asset management firm LGT Capital Partners. The agreement gives Landsbankinn’s customers the opportunity to invest in the diverse funds of LGT Capital Partners, variously emphasising venture capital investment, asset diversification and liquidity management based on sustainability principles.
Work has been on-going on the implementation of Landsbankinn’s policy on responsible investment ever since it was adopted in 2013. The aim is to allow the Bank to integrate social responsibility and investment decisions.
In 2018, strategic efforts were made to expand and deepen the Bank’s experts’ knowledge of the methodology of responsible investment. All of the Bank’s fund managers, who take investment decisions, have completed courses offered by PRI, an international association of investors and proponent of responsible investment. Emphasis has also been placed on raising awareness about green bonds. The Bank has cultivated in-house expertise that has been leveraged to educate key issuers about this interesting new approach. Landsbankinn expects the asset class to grow in coming years.
Economic growth is expected to slow somewhat in 2019 following robust growth in recent years and inflation can be expected to remain above target for some time going forward. This is not to say that economic contraction is expected; rather, more conservative growth is in the cards. In early 2019, two factors will be key to stock market developments. The outcome of collective bargaining talks will have a considerable impact on the performance of companies with domestic wage expenses and the conclusion of Indigo’s purchase of a minority shareholding in WOW air will impact the domestic travel sector in general and Icelandair in particular.
The year 2018 saw several mergers in the domestic market, N1 and Festi, Hagar and Olís, and finally Vodafone and 365. Synergies can be expected to actualise in this year’s operations. Marel aims at double-listing abroad in 2019 and the outcome will be interesting. Successful double listing can be expected to have a positive impact on other listed companies. It will be interesting to see if listed companies continue to grow in number in 2019 and whether changes are made to the State’s holdings in Landsbankinn and Íslandsbanki. Liberalisation of capital controls is imminent and will most likely have a positive impact on the market. In fall, Iceland will be incorporated into international Frontier Markets indices which can be expected to positively affect foreign investor interest.