Norway wealth fund grows to record $1.09 trillion

The fund’s chief executive, Yngve Slyngstad, said that ‘the return on the investments in global financial markets has been so high that it can be compared to having discovered oil again.’ (AFP)
Updated 25 October 2019

Norway wealth fund grows to record $1.09 trillion

  • The fund reached the milestone as its government regulators grapple with strategy changes
  • The size of the fund has grown to almost three times that of Norway’s annual gross domestic product

OSLO: The value of Norway’s sovereign wealth fund, the world’s largest, grew to a record 10 trillion Norwegian crowns ($1.09 trillion) on Friday, boosted by rising global stocks and the strength of the euro and dollar.
The fund reached the milestone as its government regulators grapple with strategy changes, including how to handle climate risk and a proposed large-scale shift of investments into the United States.
Built since 1996 to save petroleum revenues for future generations, the size of the fund has grown to almost three times that of Norway’s annual gross domestic product, far exceeding original projections.
“When the fund was set up, nobody thought it would pass 10,000 billion crowns. We were lucky to discover oil,” the fund’s chief executive, Yngve Slyngstad, said in a statement confirming the record.
“The return on the investments in global financial markets has been so high that it can be compared to having discovered oil again,” he said.
An update on the fund’s website showed the Government Pension Fund Global’s value reaching 10 trillion Norwegian crowns for the first time at 0857 GMT — more than $200,000 for every man, woman and child in Norway.
Commonly known as the oil fund and managed by a unit of the central bank, it invests close to 70 percent of funds in global equities and some 28 percent in a portfolio of fixed-income assets. Unlisted real estate holdings make up the rest.
On Aug. 27, the central bank proposed a shift that could ultimately move more than $100 billion out of European stock markets and into the United States, although such a move, if approved, could take years to complete.
The $750 billion equities portfolio has historically been heavily weighted toward Europe, aligning its fortunes with countries from which Norway draws most of its imports.
A move away from Europe would not be a verdict on the continent’s prospects, the fund insists, but would reflect a desire to apply neutral weights to global stock markets and thus make returns less dependent on a particular region.


France ready to take Trump’s tariff threat to WTO

Updated 08 December 2019

France ready to take Trump’s tariff threat to WTO

  • Macron government will discuss a global digital tax with Washington at the OECD, says finance minister

PARIS: France is ready to go to the World Trade Organization to challenge US President Donald Trump’s threat to put tariffs on French goods in a row over a French tax on internet companies, its finance minister said on Sunday.

“We are ready to take this to an international court, notably the WTO, because the national tax on digital companies touches US companies in the same way as EU or French companies or Chinese. It is not discriminatory,” Finance Minister Bruno Le Maire told France 3 television. Paris has long complained about US digital companies not paying enough tax on revenues earned in France.

In July, the French government decided to apply a 3 percent levy on revenue from digital services earned in France by firms with more than €25 million in French revenue and €750 million ($845 million) worldwide. It is due to kick in retroactively from the start of 2019.

Washington is threatening to retaliate with heavy duties on imports of French cheeses and luxury handbags, but France and the EU say they are ready to retaliate in turn if Trump carries out the threat. Le Maire said France was willing to discuss a global digital tax with the US at the Organization for Economic Cooperation and Development (OECD), but that such a tax could not be optional for internet companies.

“If there is agreement at the OECD, all the better, then we will finally have a global digital tax. If there is no agreement at OECD level, we will restart talks at EU level,” Le Maire said.

He added that new EU Commissioner for Economy Paolo Gentiloni had already proposed to restart such talks.

France pushed ahead with its digital tax after EU member states, under the previous executive European Commission, failed to agree on a levy valid across the bloc after opposition from Ireland, Denmark, Sweden and Finland.

The new European Commission assumed office on Dec. 1.