* Four IPOs already seen in last 13 months
* Iceland stock exchange sees five new listings 2013
* Domestic institutional investors' cash locked in Iceland
* Bourse total value up 20 percent to $3.1 bln in 2012
By Ole Mikkelsen
COPENHAGEN, Jan 4 Rules preventing Icelandic investors moving money abroad could increase the appeal of local stock market flotations and help tempt more firms to go public as the country recovers from its economic implosion four years ago.
Four companies have already unveiled plans to go public in 2013 - insurers TM and Sjova, real estate company Reitir and oil retailer N1 - joining the four which completed initial public offerings (IPOs) in the last 13 months.
Most companies left the Reykjavik bourse after the collapse of Iceland's biggest banks in 2008, causing a deep recession and forcing the government to bring in capital controls forbidding people from taking Icelandic currency outside the country.
Yet the market is showing signs of life and the total value of the Reykjavik bourse increased 20 percent in 2012 to around 400 billion Icelandic crowns ($3.1 billion), with trading volume up 29 percent at 89 billion crowns in 2012 from 69 billion in 2011, a bourse spokeswoman said.
Nasdaq OMX Iceland President Pall Hardarson told Reuters via email: "(Last year) was characterised by a positive development in equities, investors have welcomed new investment options. We are excited by the listing prospects in the stock market."
Last year's flotations took the number of companies on Reykjavik's main list to 11 and made the small north Atlantic island nation's IPO market relatively buoyant compared with Europe as a whole, where the volume of new listings fell more than 60 percent on 2011.
Stocks which listed in the past year or so were retailer Hagar, which made its debut in late December 2011, followed by real estate company Reginn, shipping group Eimskip and telecoms operator Fjarskipti .
All offers were oversubscribed, with demand mainly driven by local Icelandic institutional investors such as pension funds.
The market still has a way to go to match its value of around 2,500 billion crowns in the years preceding the crash. But with investor money piling up and capital controls set to stay in place for years to come, the key bourse's key drivers remain in place.
The fact Iceland issues few government bonds adds to Icelandic institutional investors' appetite for stocks, as they seek to diversify their portfolios, said Stefan Gudjonsson, analyst at Arion Banki. "There is a lack of investment opportunities."
Another five companies were expected to list in 2013, according to the head of the Reykjavik bourse.
Analysts say some of the country's biggest banks, nationalised during the crisis, may also relist at some point. "It will probably not be this year but in coming years," Gudjonsson said.
The estate of one of the failed banks, Landsbankinn, has already said it is aiming for a listing at some stage.
Some observers, such as Danske Markets Chief Analyst Lars Christensen, said there were concerns that locking investors' cash in Iceland has made companies overvalued.
But others say there were reasons for greater optimism.
Gudjonsson said he didn't fear a bubble, pointing to strong corporate balance sheets after restructuring measures taken following the crash. (Editing by David Holmes)