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Tuesday, January 18, 2022

Norway’s sovereign wealth fund dumps Saudi shares for Qatar stocks


The shift in the fund’s strategy, worth $1.3 trillion, shows a positive outlook and injects high hopes for the Qatari economy.

Norway’s sovereign wealth fund, the largest in the world, slashed its investments in Saudi Arabia stocks while increasing the size of its Qatar-based shares seven-fold over the last year, Bloomberg reported.

According to data from Norges Bank Investment Management, the entity that manages the wealth fund, total holdings in Saudi shares fell from $420 million in 2019 to $194 million in December 2020.

On the flip side, the wealth fund picked up its investments in Qatari shares from a mere $80 million to $582 million, a 627.5% increase over the course of a year. In 2019, the total investments by other Norwegian companies in Qatar reached nearly $10 billion. 

In March, Yngve Slyngstad, the fund’s former chief executive, said investment in Saudi shares were being reduced due to an internal review of global investment criteria.

This was reaffirmed by the fund’s current CEO, Nicolai Tangen, who said on Thursday that Saudi Arabia’s presence in the portfolio continued to diminish because investments had not earned within the fund’s previous benchmarks.

The shift in the fund’s investment comes months after Saudi Arabia, along with other GCC countries, restored diplomatic and economic relations with Qatar. The Quartet was involved in an illegal air, land and sea blockade that was imposed in June 2017 under the pretext of Qatar’s alleged support for terrorism. Doha has vehemently and consistently denied the allegations.

However, Saudi Arabia was not the only country whose shares were reduced in 2020 by the Norway fund.

Holdings from Oman, UAE, Turkey, Kuwait and Israel were also dropped, while Bahrain and Egypt saw an increase in investment by the Norwegian wealth fund.

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