Norway’s $1.3 Trillion Fund Dumped Saudi Shares, Added Qatar

Norway’s $1.3 trillion sovereign wealth fund slashed its exposure to Saudi Arabian stocks last year while boosting its portfolio in neighboring Qatar by almost seven times.

Total holdings of shares in Riyadh fell to about $194 million as of the end of December from $420 million the year before, according to data from Norges Bank Investment Management, which manages the fund. In Doha, exposure surged to $582 million from $80 million. Qatar is now its second-biggest holding in the Gulf after the United Arab Emirates.

Norway’s $1.3 Trillion Fund Dumped Saudi Shares, Added Qatar

The shift highlights a turn by the world’s biggest sovereign wealth fund in two Gulf countries that were on opposite sides of a spat in the oil-abundant region that ended in January after almost four years. Starting in 2017, Saudi Arabia joined a group of countries that cut ties with Qatar on accusations that the gas-rich nation supported terrorism. The country has always denied the claim.

The Oslo-based fund generated $123 billion of returns in 2020, its second-best performance ever thanks in large part to tech stocks. But, some of its biggest losses were tied to its holdings of oil companies and the fund exited stocks focused on oil exploration and production last year.

Nicolai Tangen, chief executive officer since September, said Thursday he doesn’t expect the stimulus-driven surge in equity markets to continue, and that his strategy will rely largely on a “forensic” approach to ethical investing, implying portfolio companies will face more intense scrutiny.

His predecessor, Yngve Slyngstad, said last March that the holding of Saudi shares was shrinking as a result of a review of an internal benchmark considered for global investments. Tangen said Thursday Saudi Arabia’s presence in the portfolio continued to diminish because it didn’t earn a weight within the fund’s benchmark as expected in previous years. Investments in other markets in the region are made on a individual company basis, he said.

Norway’s $1.3 Trillion Fund Dumped Saudi Shares, Added Qatar

The Norwegian fund also chopped equities ownership last year in Oman, the UAE, Turkey, Kuwait and Israel, while increasing holdings in Egypt and Bahrain.

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