Norway wealth fund posts record $164 bln loss

Norway wealth fund posts record $164 bln loss

  • Loss in 2022 exceeds earlier record from 2008
  • Inflation, geopolitical tensions stay threat elements
  • Record influx of cash from oil and fuel business

OSLO, Jan 31 (Reuters) – Norway’s wealth fund, one of many world’s largest traders, posted a record loss of 1.64 trillion crowns ($164.4 billion) for 2022, bringing to an finish a three-year run of hovering income as shares and bonds have been hit by the Ukraine conflict and inflation.

The earlier largest loss was 633 billion crowns in 2008.

It ends a record-breaking streak for the fund, the place annual returns exceeded one trillion crowns in every of the three years from 2019 to 2021, amounting to greater than 4 trillion crowns mixed.

“We are invested in 9,000 corporations in 70 international locations. There is simply nowhere to cover,” fund Chief Executive Nicolai Tangen instructed a information convention.

The single largest inventory market loss got here from the fund’s stake in Amazon (AMZN.O), which declined in worth by 56 billion crowns, adopted by a loss in shares of Facebook proprietor Meta Platforms (META.O) of 52 billion and in Tesla (TSLA.O) with 47 billion.

Still, regardless of the record loss, the worth of the fund rose total by 89 billion crowns or $8.9 billion year-on-year, partly because of the weak Norwegian forex and a record 1.1 trillion crowns of money inflows.

The inflows in 2022 have been practically 3 times the earlier record, of 386 billion crowns, set in 2008.

The fund invests the Norwegian state’s revenues from petroleum manufacturing. As a serious crude exporter and Europe’s largest fuel provider after a drop in Russian fuel flows, Norway benefited from excessive vitality costs because of the conflict in Ukraine.

Reuters Graphics

“We need to be very aware of the truth that the influx got here in opposition to a tragic backdrop in Europe,” Tangen stated.

“But it’s an remoted mathematical proven fact that when oil and fuel costs are greater, there’s extra income to the (Norwegian) authorities and extra influx into the fund.”

The fund owns on common 1.3% of all listed shares. It additionally invests in bonds, unlisted actual property and renewable vitality tasks.

Looking forward, Tangen stated inflation would proceed to be a fear.

“Inflation stays a threat issue and, specifically, tied into what’s going to occur when China actually kicks in on the consumption facet as a result of it may drive plenty of costs globally,” Tangen instructed Reuters.

“And then after all we have now nonetheless geopolitical hotspots.”

The fund’s return on funding in 2022 stood at minus 14.1% for the 12 months, which was 0.88 proportion level higher than the return on the fund’s benchmark index.

($1 = 9.9752 Norwegian crowns)

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

Our Standards: The Thomson Reuters Trust Principles.