Norway’s sovereign wealth fund has hit US$1 trillion for the first time, driven higher by climbing stock markets and a weaker US dollar.
The milestone valuation was reached for the first time on Tuesday, September 19 at 2:01am in Oslo, Norges Bank Investment Management.
“I don’t think anyone expected the fund to ever reach $1tn when the first transfer of oil revenue was made in May 1996,” said Yngve Slyngstad, the chief executive of the fund. “Reaching $1tn is a milestone, and the growth in the fund’s market value has been stunning.”
But the extreme wealth, about equal to the GDP of Mexico, isn’t unalloyed good news.
The fund’s sheer size has made it a challenge to find markets big enough to invest in. Meanwhile, Norway’s politicians are finding it hard to resist the temptation to raid the world’s biggest state piggy bank, with the petro-dollar addiction threatening to overheat the $400 billion economy.
It has few rivals in terms of size. Japan’s Government Pension Investment Fund was valued at $1.3tn at the current exchange rate) at the end of March. China, of course, has about $3tn in currency reserves. There are also big cash-piles at money management firms such as BlackRock’s $5.7tn and Vanguard Group’s $4.4tn.
Slyngstad recently suggested it’s now largely fruitless for it to enter new asset classes such as infrastructure because that would be costly and only deliver a blip on overall returns. The investor is also retrenching its global bond portfolio, cutting 23 currencies down to just three -- the dollar, the euro and the pound. The fund says it doesn’t make sense to have more diversification in a world in which prices and rates are converging.
Its huge size has also driven the fund to respond to problems with trading by devisingelaborate strategies to hide its selling and buying from anyone seeking to front-run its activities.
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But being big has its advantages, especially for a lean organisation like Norges Bank Investment Management. The fund only employs about 550 people in offices across the entire globe (Oslo, New York, London, Shanghai and Singapore). Management costs were equal to just 0.02 per cent of assets in the most recent quarter, down from 0.07 per cent five years ago.
The decline in costs comes despite the fund’s expansion into real estate. It’s snapped up prime properties in Times Square, the Champs Elysees and London’s Regent Street, among other locations. It owned 200bn kroner (Dh95.51bn) in real estate at the end of June.
For now, there’s been little discussion about breaking the fund up into smaller, more nimble entities, though the government is currently pondering a proposal to shift it out of the central bank and strengthen oversight.
So what lies ahead? Norway expects the fund to keep growing through 2025, when it’s predicted to hit $1.3tn at today’s exchange rate. But such estimates are notoriously unreliable. Its current size already exceeds the milestone it wasn’t expected to reach until 2018.
With interest rates at record lows and returns hard to come by, the fund’s management is growing less optimistic. The central bank governor Oystein Olsen has warned the decline in oil prices means the fund may already have passed its peak.
Norway’s government last year made direct withdrawals from the fund for the first time in its history and is expected to take out about 70bn kroner this year. Meanwhile, Norway has lowered the fund’s expected return to 3 per cent from 4 per cent.
The fund has been given permission to raise its stock holdings to 70 per cent from 60 per cent, with an equivalent cut in bonds. That could help it eke out higher returns, or at least maintain the 8 per cent annualised real return it’s had over the past five years.
But Mr Slyngstad also recently said he sees fundamental issues with the global economic system and trade, which is being buffeted by increasing global political risk. And that’s not good for a fund that owns 1.3 per cent of global stocks.
Norwegian finance minister, Siv Jensen, on Tuesday also praised the fund for its “good management” and pledged a stable political climate as she prepares for another four years in power after securing reelection last week.
“The fund’s value has increased by 3tn kroner in the past four years,” she said. “The guidelines for fiscal policy should secure that the fund is to the benefit of current and future generations.”
The five pillars of Islam
The Details
Kabir Singh
Produced by: Cinestaan Studios, T-Series
Directed by: Sandeep Reddy Vanga
Starring: Shahid Kapoor, Kiara Advani, Suresh Oberoi, Soham Majumdar, Arjun Pahwa
Rating: 2.5/5
Company%20Profile
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3EDirect%20Debit%20System%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20Sept%202017%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20with%20a%20subsidiary%20in%20the%20UK%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20FinTech%3Cbr%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20Undisclosed%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Elaine%20Jones%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%3C%2Fstrong%3E%208%3Cbr%3E%3C%2Fp%3E%0A
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
The%20specs%3A%20Macan%20Turbo
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3EDual%20synchronous%20electric%20motors%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E639hp%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E1%2C130Nm%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESingle-speed%20automatic%3Cbr%3E%3Cstrong%3ETouring%20range%3A%20%3C%2Fstrong%3E591km%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh412%2C500%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3EDeliveries%20start%20in%20October%3C%2Fp%3E%0A
The Perfect Couple
Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
Rating: 3/5
BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
The specs
Engine: 2.0-litre 4-cylturbo
Transmission: seven-speed DSG automatic
Power: 242bhp
Torque: 370Nm
Price: Dh136,814
Rocketman
Director: Dexter Fletcher
Starring: Taron Egerton, Richard Madden, Jamie Bell
Rating: 3 out of 5 stars
Should late investors consider cryptocurrencies?
Wealth managers recommend late investors to have a balanced portfolio that typically includes traditional assets such as cash, government and corporate bonds, equities, commodities and commercial property.
They do not usually recommend investing in Bitcoin or other cryptocurrencies due to the risk and volatility associated with them.
“It has produced eye-watering returns for some, whereas others have lost substantially as this has all depended purely on timing and when the buy-in was. If someone still has about 20 to 25 years until retirement, there isn’t any need to take such risks,” Rupert Connor of Abacus Financial Consultant says.
He adds that if a person is interested in owning a business or growing a property portfolio to increase their retirement income, this can be encouraged provided they keep in mind the overall risk profile of these assets.
The biog
Favourite hobby: taking his rescue dog, Sally, for long walks.
Favourite book: anything by Stephen King, although he said the films rarely match the quality of the books
Favourite film: The Shawshank Redemption stands out as his favourite movie, a classic King novella
Favourite music: “I have a wide and varied music taste, so it would be unfair to pick a single song from blues to rock as a favourite"
HWJN
%3Cp%3EDirector%3A%20Yasir%20Alyasiri%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Baraa%20Alem%2C%20Nour%20Alkhadra%2C%20Alanoud%20Saud%3C%2Fp%3E%0A%3Cp%3ERating%3A%203%2F5%3C%2Fp%3E%0A%3Cp%3E%3C%2Fp%3E%0A
Company%20Profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Hoopla%3Cbr%3E%3Cstrong%3EDate%20started%3A%20%3C%2Fstrong%3EMarch%202023%3Cbr%3E%3Cstrong%3EFounder%3A%3C%2Fstrong%3E%20Jacqueline%20Perrottet%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2010%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3EPre-seed%3Cbr%3E%3Cstrong%3EInvestment%20required%3A%3C%2Fstrong%3E%20%24500%2C000%3C%2Fp%3E%0A
WHAT%20MACRO%20FACTORS%20ARE%20IMPACTING%20META%20TECH%20MARKETS%3F
%3Cp%3E%E2%80%A2%20Looming%20global%20slowdown%20and%20recession%20in%20key%20economies%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Russia-Ukraine%20war%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Interest%20rate%20hikes%20and%20the%20rising%20cost%20of%20debt%20servicing%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Oil%20price%20volatility%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Persisting%20inflationary%20pressures%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Exchange%20rate%20fluctuations%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Shortage%20of%20labour%2Fskills%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20A%20resurgence%20of%20Covid%3F%3C%2Fp%3E%0A
Where can I submit a sample?
Volunteers can now submit DNA samples at a number of centres across Abu Dhabi. The programme is open to all ages.
Collection centres in Abu Dhabi include:
- Abu Dhabi National Exhibition Centre (ADNEC)
- Biogenix Labs in Masdar City
- Al Towayya in Al Ain
- NMC Royal Hospital in Khalifa City
- Bareen International Hospital
- NMC Specialty Hospital, Al Ain
- NMC Royal Medical Centre - Abu Dhabi
- NMC Royal Women’s Hospital.
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3EKinetic%207%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202018%3Cbr%3E%3Cstrong%3EFounder%3A%3C%2Fstrong%3E%20Rick%20Parish%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Abu%20Dhabi%2C%20UAE%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Clean%20cooking%3Cbr%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%2410%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Self-funded%3C%2Fp%3E%0A
Tips from the expert
Dobromir Radichkov, chief data officer at dubizzle and Bayut, offers a few tips for UAE residents looking to earn some cash from pre-loved items.
- Sellers should focus on providing high-quality used goods at attractive prices to buyers.
- It’s important to use clear and appealing photos, with catchy titles and detailed descriptions to capture the attention of prospective buyers.
- Try to advertise a realistic price to attract buyers looking for good deals, especially in the current environment where consumers are significantly more price-sensitive.
- Be creative and look around your home for valuable items that you no longer need but might be useful to others.
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
TO ALL THE BOYS: ALWAYS AND FOREVER
Directed by: Michael Fimognari
Starring: Lana Condor and Noah Centineo
Two stars
'Fantastic Beasts: The Secrets of Dumbledore'
Rating: 3/5
Directed by: David Yates
Starring: Mads Mikkelson, Eddie Redmayne, Ezra Miller, Jude Law
'Laal Kaptaan'
Director: Navdeep Singh
Stars: Saif Ali Khan, Manav Vij, Deepak Dobriyal, Zoya Hussain
Rating: 2/5