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OIL FUND

Record quarter for Norwegian wealth fund

Norway's sovereign wealth fund, the largest in the world, more than covered the losses its suffered last year with a record performance in the first three months of this year.

Record quarter for Norwegian wealth fund
Yngve Slyngstad. File photo: Gwladys Fouche / Reuters / Ritzau Scanpix
The fund, which receives the state's oil revenues to manage in order to finance Norway's generous welfare state when its oil and gas wells run dry, earned a return of 9.1 percent on its investments in the first quarter.
 
At 738 billion kroner ($84 billion) “this is the fund's best quarterly return measured in kroner ever”, its manager Yngve Slyngstad said in a statement.
 
The result more than compensated for a loss of 485 billion kroner the fund, managed by the Norwegian central bank, registered last year due to weak global stock markets.
 
“As a major equity investor we must be prepared for large fluctuations in the fund's market value in line with developments in global stock markets,”added Slyngstad.
 
The total value of the fund stood at just above $1 trillion at the end of March.

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OIL FUND

Norway oil fund loses 18 billion euros in first half of 2020

Norway's huge sovereign wealth fund, the world's biggest, lost 188 billion kroner (18 billion euros, $21 billion) in the first half of the year as the global economy reels from the Covid-19 pandemic, the central bank said Tuesday.

Norway oil fund loses 18 billion euros in first half of 2020
Unusually empty slopes and ski lifts in Hemsedal in April. Photo: AFP

The fund, in which the Norwegian state's oil revenues are invested, was hit by plummeting share prices, with stocks accounting for 69.6 percent of its investments.

Its share portfolio posted a negative return of 6.8 percent in the first six months of the year.

At the end of June, the fund was valued at 10.4 trillion kroner (989 billion euros), up from the 9.98 trillion kroner seen at the end of the first quarter.

“The year started with optimism, but the outlook of the equity market quickly turned when the coronavirus started to spread globally,” the fund's deputy chief executive, Trond Grande, said in a statement.

“However, the sharp stock market decline of the first quarter was limited by a massive monetary and financial policy response,” he added.

Real estate investments, which represent 2.8 percent of the portfolio, also posted a negative return, of 1.6 percent, while bond investments, which account for 27.6 percent of assets, posted a gain of 5.1 percent.

“Even though markets recovered well in the second quarter, we are still witnessing considerable uncertainty,” Grande said.

The fund is meanwhile still mired in controversy over the appointment of a new chief executive.

Nicolai Tangen, a billionaire who founded the AKO Capital hedge fund in London, is due to take over the fund on September 1st, replacing Yngve Slyngstad who is retiring.

But critics have complained about Tangen's possible conflicts of interest, as well as his use of tax havens.

The central bank has meanwhile been criticised for irregularities in the recruitment process.

As a result, some major political parties are opposed to Tangen's appointment, and it remains up in the air.

READ ALSO: Norway's oil fund loses 1.3 trillion kroner ($125bn) in coronavirus crash

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