Reykjavik stocks show 76-pct fall but officials blame calculation quirk

REYKJAVIK, October 14, 2008 (AFP) – Trading resumed on the Reykjavik stock exchange Tuesday and the main index showed a decline of 76.13 percent, but market officials insisted this figure was heavily distorted by the absence of trading in finance companies.

Excluding Iceland’s comatose financial stocks, which were suspended more than a week ago and had not resumed trading, the stock market index opened only 0.57 percent lower, the stock exchange said.

“We have stripped the three main banks (which were all nationalised last week) from the index. Earlier they accounted for 75 percent of the index,” exchange spokeswoman Kristin Johannsdottir told AFP.

“When not included, the index is mechanically down to 25 percent of its previous value,” she explained.

The stock exchange’s chief executive, Thordur Fridjonsson, cautioned that it would probably take a while for the financial stocks to resume trading.

“They will probably not be coming back for some time. The three main banks are not being listed since they are being placed under state control,” he told AFP.

Other financial shares would remain listed but would not resume trading until Iceland’s Financial Services Authority gave the green light, he said.

Trading in non-financial