Norway's sovereign wealth fund suffered a historic NOK 1,171 billion loss |
Individual customers
Business customers

Coronavirus | Norway's sovereign wealth fund suffered a historic NOK 1,171 billion loss

Coronavirus | Norway's sovereign wealth fund suffered a historic NOK 1,171 billion loss | ECONOMY
CEO - NBIM, Yngve Slyngstad. (Foto: Nils Stian Aasheim, Norges Bank)

The world's largest sovereign wealth fund saw its portfolio, with 71% invested in stocks, severely affected by the market storm in the first quarter. This is the worst quarterly result at a time when the Norwegian government needs to fund its plan to support the local economy.

In the first quarter of 2020, the Government Pension Fund Global returned -14.6 percent, equivalent to -1,171 billion NOK. The fund is planning to liquidate assets to aid government expenditure as a result of the economic impact of the coronavirus crisis in the country.

Norway government is facing difficulty in managing expenditure with petroleum revenue facing a sharp decline. That means it will need to withdraw historic sums from its wealth fund to make ends meet. Earlier this month, the Norges Bank had announced that it will funnel oil revenues from its sovereign wealth fund to ease the economic impact on the country.

“The effects of the coronavirus outbreak on the Norwegian economy and the measures implemented to limit the consequences of the outbreak entail an increase in government spending and a decline in government revenues. The government must, therefore, convert an increased share of petroleum revenues into NOK currency. Norges Bank is responsible for executing these foreign exchange transactions on behalf of the government,” it had said in an official statement.

The return on the fund’s equity investments was -21.1 percent, and the return on the fixed income investments was 1,3 percent. The return on the investments in unlisted real estate have not been updated with valuations of the properties for the first quarter. This will be presented 23 April. The global equity markets saw a sharp decline in the first quarter, but picked up somewhat towards the end of the quarter. There have been major fluctuations throughout the whole quarter.

«We have seen a substantial decline in the world’s equity markets in the first quarter, with considerable fluctuations from one day to the next. The market situation is very challenging. However, the fund has a long-term horizon, says CEO of Norges Bank Investment Management Yngve Slyngstad.

The krone depreciated against several of the main currencies during the quarter. The currency movements contributed to an increase in the fund’s value of 1,147 billion kroner. The fund’s market value measured in Norwegian kroner has therefore not changed much from year-end 2019. In the first quarter, 67 billion kroner was withdrawn from the fund.

The fund had a value of 9,760 billion kroner as of 5th april 2020.


Credit Card in Norway for Expats: 5 Things You Need to Know
You're researching "Credit Card in Norway", and you're exploring which option is best for expats. This list can help make your search easier.Roughly half a million people moved to
Things To Do In Norway - A Basic Guide
It might be a bit of a stretch to call Norway the most beautiful country in the world, but it would surely be in the running. Its deep fjords, rough shoreline, majestic
Estate valuation service in Norway | Evaluate your property with local realtor brokerages
How much is your property in Norway worth? If you're not sure, it might be a good idea to find out. Learn about this estate valuation service in Norway.In 2021, there was a 2.8%
Navigating the business landscape in Norway | A beginner's guide
Learn how to start a successful business in Norway with our guide, covering everything from the initial idea to navigating the Norwegian business environment.Starting a business
Previously article Next article
Advertisement Amex

The content of this website is for information purposes only and does not constitute as advice. While we take every care to ensure the information provided is correct and up to date, please always check with your providers before committing yourselves. Some products and benefits only available from selected brokers. Our service is free to you but to operate this service we may receive a fixed fee and/or commission from the provider or broker we refer you to. Calls from consultants may be recorded or monitored for regulatory, training and quality purposes.

©™ is an appointed representative of © LOCALMARKET GROUP AS (925383082) & BUSINESS LINK NORWAY (819464332) registered in The Office of Business Enterprises in The Kingdom of Norway | Brønnøysundregistrene. Financial & Insurance Services and Markets Authority, and subject to limited regulation by the Financial Conduct Authority. Head Office Adresse: Karenslyst Alle 4, 0278 Oslo – Skøyen. Post Adresse: Postboks 358, 0213 Oslo, Norway. Email Contact: Office Contact: + 47 23 89 88 63 © Copyright 2016-2024 The LOCALMARKET GROUP ™.

This site uses cookies

Find more

I agree