ISThe article discusses the current state of valuation metrics for the Icelandic stock market index OMXI15, focusing on the cyclically adjusted price-to-earnings ratio (CAPE). As of June 2026, the CAPE ratio stands at 20.6, which is close to the historical average. The traditional P/E ratio based on twelve-month trailing earnings is around 13.2, the lowest since June 2023. The article explains that lower CAPE values indicate potentially overvalued stocks but notes that this must be considered alongside inflation trends. It also mentions recent changes to the OMXI15 composition, including the addition of two new companies. Comparisons are made with the S&P 500 index, where the CAPE was 39.5 in June, indicating higher valuations. The article highlights potential risks in investing in equities compared to government bonds, noting that Icelandic government bond yields were 7.25%, while inflation-adjusted returns were 4.1%. Inflation expectations in Iceland rose by 5.2% year-over-year in June, compared to 4.2% in the U.S. The author, a economist, provides background on his work calculating and publishing monthly CAPE data for OMXI10 since 2016.
Bias read (Center): The article presents factual economic data and comparisons without overt ideological slant. While it discusses financial indicators relevant to investment decisions, it does not take a clear partisan position. The framing remains neutral, providing balanced information about valuation ratios, market
