Norway wealth fund hits record $1 trillion ahead of revamp

OSLO,  (Reuters) – Norway’s sovereign wealth fund, the world’s largest, totalled $1 trillion for the first time on Tuesday as booming global stock markets and a rising euro lifted the value of its assets.

Oslo has grown increasingly dependent on the fund for public spending and its record value comes a day after Erna Solberg won an historic second term as Norway’s prime minister.

Solberg’s new government will now oversee a planned overhaul of the fund, in particular of its governance and strategy, which is expected in the coming months.

“There is an ongoing process towards a modernisation of the mandate of Norges Bank. This process was initiated by the Solberg I government and the (election) outcome should help hasten this process,” Danske Bank said in a note to clients.

Established in 1998 to save oil and gas revenues for future generations, the fund is now worth about 2.5 times Norway’s annual gross domestic product, against original projections it would peak at 1.3 times GDP in the 2020s.

A live update on the fund’s website showed its value at 7.851 trillion Norwegian crowns at 1034 GMT, corresponding to $1 trillion according to Thomson Reuters Eikon currency data, or $190,000 for every man, woman and child in Norway.

But despite the growth in the fund’s size, its use for public spending has rung alarm bells, with the central bank governor warning in February that it could make Norway too reliant on an uncertain source of income.

“Regardless of which government we get, the challenge will be to use less oil money,” Erik Bruce, chief analyst at Nordea Markets, said.

Under a recently revised rule, governments can spend 3 percent of the fund’s value per year, down from 4 percent, corresponding to 235 billion crowns of the current size. The 2017 budget has earmarked 221 billion crowns for spending.

Two issues are up for review, the first being whether the fund’s management be completely separated from the central bank.

The second is whether the fund should be allowed to invest in new asset classes, including unlisted shares and unlisted infrastructure projects, to boost its rate of return, something that is supported by the fund’s existing managers.

“The bank’s explicit position is that we will get a higher return and a lower risk by investing in infrastructure,” CEO Yngve Slyngstad told Reuters in June.

Investing in airports, roads, bridges or wind farms — has been a hot topic in recent months, but the finance minister, Siv Jensen of the populist Progress Party, has twice declined to bring the proposal to parliament, citing political risk.

That is unlikely to change with the new government.

Almost two thirds of the fund’s assets were held in equities at the end of the second quarter, giving it control over 1.3 percent of all globally listed stocks.

By contrast, Norway’s population of 5.3 million people corresponds to less than 0.1 percent of the world’s population.

By 1148 GMT, the fund’s value had again dipped slightly below the trillion-dollar mark, standing at $998 billion.


Special counsel files new charges against Trump ex-aides Manafort and Gates

WASHINGTON,  (Reuters) – The special counsel in the Russia probe filed new criminal charges yesterday against President Donald Trump’s former campaign aides Paul Manafort and Rick Gates, stepping up pressure in a legal battle that started last year.

Chinese trawlers travel farthest and fish the most – study

(Reuters) – China has the world’s largest and farthest-ranging fishing operation, outstripping the next 10 biggest combined, according to what researchers say is the most comprehensive and data-intensive study on the subject.

India seizes billionaire jeweller’s Rolls-Royce, Porsche in bank fraud probe

MUMBAI, (Reuters) – An Indian financial crime-fighting agency said on Thursday it has seized a Rolls-Royce Ghost, a Porsche Panamera and some half a dozen more luxury vehicles belonging to billionaire jeweller Nirav Modi and his firms, in a probe into an alleged $1.8 billion fraud against state-run Punjab National Bank.

BlackRock puts gunmakers on notice after Florida school shooting

BOSTON/NEW YORK,  (Reuters) – The world’s largest asset manager put U.S. gunmakers on notice yesterday that it is no longer business as usual in the wake of a shooting that killed 17 at a Florida high school.

U.S. students protest gun laws, Trump considers arming teachers

WASHINGTON/TALLAHASSEE, Fla., (Reuters) – Students galvanized by the deadly mass shooting at a Florida high school confronted lawmakers yesterday with demands to restrict sales of assault rifles, while President Donald Trump suggested arming teachers as a way to stop more U.S.

Your browser is out-of-date!

Update your browser to view this website correctly.

We built using new technology. This makes our website faster, more feature rich and easier to use for 95% of our readers.
Unfortunately, your browser does not support some of these technologies. Click the button below and choose a modern browser to receive our intended user experience.

Update my browser now