Iceland has been awarded emerging market status by FTSE Russell, the index arm of the LSE Group.

FTSE Russell said on Friday Iceland has been approved as a Secondary Emerging market and New Zealand’s government bonds will be included in the FTSE World Government Bond Index, as part of the index firm’s semi-annual review.

The promotion of Iceland, which will happen in September to allow firms holding FTSE Emerging Markets indices time to make the necessary changes, was welcomed by US group Nasdaq, which operates the Icelandic exchange.

Bjørn Sibbern, president of European Markets at Nasdaq, said: “The Icelandic equity market has been growing steadily by the year. The transition to FTSE’s Secondary Emerging Market status is a testimony of confidence for continued growth and could further elevate interest in the Icelandic economy and equity market, creating new opportunities for both companies and investors.”

Nasdaq said fifteen Icelandic securities are expected to be eligible for the FTSE Global All Cap Index and the promotion “will help facilitate substantial new inflow into the Icelandic economy and support capital raising opportunities for listed companies”.

Magnus Hardarson, president of Nasdaq Iceland, said: “This is a major milestone for the Icelandic equity market and great news for the wider Icelandic economy. FTSE’s decision recognises the tremendous work and effort that has been put in by all market participants to strengthen the Icelandic market within the international investment universe.”

FTSE Russell said New Zealand government bonds will be included in its World Government Bond Index in November this year.

In its statement late on Friday, FTSE Russell noted its “off-cycle reclassification of Russia to “unclassified” market status… due to the imposition of capital controls and associated restrictions on non-resident investors”.

FTSE Russell deleted last month Russia from all FTSE Russell Equity Indices following consideration by its Governance Board.

Nasdaq welcomed in June 2020 a decision by index firm MSCI to upgrade Iceland to a frontier market, adding the new-found status would act as “an impetus” for the further development of the nascent equity market.