Norwegian wealth fund loses record $164 billion

Norwegian wealth fund loses document $164 billion

  • 2022 losses exceed 2008 document
  • Inflation, geopolitical tensions stay threat components
  • Document oil and fuel trade inflows

OSLO, Jan 31 (Reuters) – Norway’s wealth fund, one of many world’s largest traders, posted a document 2022 lack of 1.64 trillion crowns ($164.4 billion), ending a three-year streak of losses on shares. Hovering earnings on bonds and bonds have been hit by the battle in Ukraine and inflation.

The earlier largest loss was SEK 633 billion in 2008.

It caps off a document run for the fund, with annual returns of greater than 1 trillion kroner in every of the three years from 2019 to 2021, for a complete of greater than 4 trillion kroner.

“We have invested in 9,000 corporations in 70 international locations. There’s nowhere to cover,” the fund’s chief govt, Nicolai Tangen, mentioned in a information launch.

The most important inventory market loss got here from the fund’s stake in Amazon (Amazon)whose worth fell by 56 billion crowns, adopted by a drop in shares of Fb proprietor Meta Platforms (META.O) 52 billion and Tesla (TSLA.O) 47 billion.

Nonetheless, regardless of the document losses, the fund’s worth rose general by 89 billion kroner, or $8.9 billion, year-on-year, partly on account of a weaker Norwegian foreign money and document money inflows of 1.1 trillion kroner.

Inflows in 2022 are virtually thrice the earlier document of 386 billion crowns set in 2008.

The fund is used to take a position the Norwegian authorities’s income from oil manufacturing. Norway, a serious crude exporter and Europe’s greatest fuel provider, has benefited from excessive power costs ensuing from the battle in Ukraine after Russian fuel flows fell.

Reuters footage

“We now have to be very clear that the inflows are taking place towards a dire backdrop in Europe,” Tangen mentioned.

“However it’s an remoted mathematical incontrovertible fact that when oil and fuel costs rise, the (Norwegian) authorities’s income will increase and so does the movement of cash into the fund.”

The fund owns a median of 1.3% of all listed shares. It additionally invests in bonds, unlisted actual property and renewable power initiatives.

Trying forward, Tangen mentioned inflation will proceed to be a priority.

“Inflation continues to be a threat issue, particularly in relation to what occurs when China really begins spending, as a result of it might drive loads of costs around the globe,” Tangen informed Reuters.

“In fact, we even have geopolitical hotspots.”

The fund’s annual funding return price in 2022 is -14.1%, which is 0.88 share factors greater than the return price of the fund’s benchmark index.

($1 = 9.9752 NOK)

Reporting by Victoria Klesty in Oslo; Enhancing by Gwladys Fouche, Terje Solsvik and Emelia Sithole-Matarise

Our requirements: Thomson Reuters Trust Principles.


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