Norges Bank

Press release

Norges Bank Investment Management: Troubled waters for international investors

“The second quarter featured considerable volatility in both equity markets and parts of fixed income markets,” says Yngve Slyngstad, Executive Director of Norges Bank Investment Management, NBIM. “The crisis in the financial system continued, with international financial institutions reporting heavy losses. Lower growth and accelerating inflation led to lower corporate earnings expectations.”

The market value of the Government Pension Fund – Global at the end of the second quarter was NOK 1 992 billion. Transfers of NOK 91 billion were made to the fund during the quarter.

The return on the fund in the second quarter was -1.9 per cent in international currency. The return on the fund was 0.24 percentage point higher than that on the benchmark portfolio defined by the Ministry of Finance.

The equity portfolio accounted for more than 50 per cent of the fund for the first time at the end of the second quarter. This expansion of the equity portfolio is a result of the Ministry of Finance’s decision on 22 June 2007 to raise the fund’s strategic allocation to equities from 40 to 60 per cent. The fund’s average ownership interest in European companies now exceeds 1 per cent.

The quarterly report includes information on NBIM’s corporate governance activities and a special focus on phasing small-cap companies into the equity portfolio.

Contact:

Press telephone: +47 21 49 09 30
Email: presse@norges-bank.no

Published 26 August 2008 10:00