The Norwegian Sovereign Wealth Fund is home to $ 1.3 trillion, much of which comes from the oil and gas businesses. It is now the largest sovereign wealth fund in the world to simplify its investment policy, as announced by the Ministry of Finance in Oslo. Accordingly, the fund should invest less in small companies in the future and be cautious about new investments in emerging markets. This should also affect Saudi Arabian companies.
According to the Treasury Department, Saudi Arabia’s shares should not be included in the benchmark index governing the fund’s investments. In an annual recommendation to Parliament, this decision is justified in emerging countries with risks in the areas of environmental, social and corporate governance.
At the same time, the government suggested that the fund should invest in fewer companies: the number of investments should be reduced from 25 to 30 percent to about 6,600 – mainly by separating shares in smaller companies. “We see a large number of companies leading to higher costs and making companies more complex,” Finance Minister Jan Tor Saner said.
Recently, Sovereign Wealth Fund held stakes in 9,200 companies and owned 1.5 percent of all shares listed on the stock exchange. Money is also invested in bonds and real estate.
The current Norwegian government does not have a majority in Parliament. Therefore it should win the support of other parties so that its resolutions can be passed.