Norwegian sovereign wealth fund reports asset impairment

The asset value of the Norwegian State Pension Fund (NBIM, also known as the Oil Fund) fell by 14.4%, or 1.68 trillion Norwegian kroner ($174 billion) in the first half of 2022. This follows from the fund’s report published on August 17 for the corresponding period.

The growth of this indicator at 14.5% for 2021, when the global economy was recovering from the pandemic, was practically nullified. The fall turned out to be the largest in terms of volume for all 26 years of the fund’s history (but not in percentage terms – in 2008 it was 23%). This happened against the backdrop of higher rates by regulators in developed countries. The Ukrainian and energy crises played a role, spurring volatility, as well as falling share prices for the shares of large technology companies in which the fund invested. The value of the fund’s portfolio of these shares fell by 28%. NBIM, in particular, invested in Meta (the activity of the company for the sale of products – social networks Facebook and Instagram is prohibited on the territory of the Russian Federation on the grounds of carrying out extremist activities), which owns Facebook and Instagram, as well as in Amazon and Apple. The price of the portfolio of securities of renewable energy producers fell by 13.3%.