Category Archives: Norway

(JN) Empresa dinamarquesa emite dívida a mil anos

(JNApesar do ano de vencimento ser apenas 3017, a procura dos investidores superou quase cinco vezes a oferta.

A Orsted, empresa dinamarquesa de energia, emitiu com sucesso dívida que vence no ano 3017. Apesar desta pouco usual longevidade a procura dos investidores (de cerca de 2,4 mil milhões de euros) superou quase cinco vezes a oferta (que ascendeu a 500 milhões de euros). Inicialmente o cupão anual desta dívida é de 2,25%.

O valor arrecadado vai ser utilizado em projectos de energia verde numa altura em que a empresa está a concluir a transição do negócio tradicional de petróleo e gás.

De acordo com a Orsted, novo nome da empresa que era conhecida como Dong Energy, a emissão foi realizada pelo Deutsche Bank, Barclays, BNP Paribas e Nordea. E começa esta sexta-feira, 24 de Novembro, a ser negociada no Luxemburgo.

Os analistas defendem que muitos dos investidores não estão a pensar no ano em que vence estes dívida 3017, mas sim no ano de 2024 (24 de Novembro), altura em que a empresa pagará pela primeira vez por estes títulos. Os investidores acreditam que a subida das taxas de juro do Banco Central Europeu (BCE), quando chegar, vai ser muito gradual e neste cenário uma taxa de 2,25% a cinco anos é muito atractiva. A empresa colocou também no mercado 750 milhões de euros a 12 anos, com vencimento em 2029 com uma taxa fixa de cupão de 1,5%.

A Orsted vendeu o seu negócio de petróleo e gás no início deste ano por mais de mil milhões de dólares e investiu este valor em novas tecnologias tais como o armazenamento em baterias. A empresa é o principal utilitário na Dinamarca e é uma das que mais parques eólicos off-shore desenvolve no mundo.

A empresa deve o seu nome a Hans Christian Ørsted, o dinamarquês que descobriu o electromagnetismo e a mudança de nome serviu para assinalar a mudança estratégica da empresa para os combustíveis fósseis.

(BBG) World’s Biggest Wealth Fund Wants Out of Oil and Gas

(BBG)  Norway’s Wealth Fund Proposes Oil, Gas Stock Exit.

The $1 trillion fund that Norway has amassed pumping oil and gas over the past two decades wants out of petroleum stocks.

Norway, which relies on oil and gas for about a fifth of economic output, would be less vulnerable to declining crude prices without its fund investing in the industry, the central bank said Thursday. The divestment would mark the second major step in scrubbing the world’s biggest wealth fund of climate risk, after it sold most of its coal stocks.

“Our perspective here is to spread the risks for the state’s wealth,” Egil Matsen, the deputy central bank governor overseeing the fund, said in an interview in Oslo. “We can do that better by not adding oil-price risk.”

The plan would entail the fund, which controls about 1.5 percent of global stocks, dumping as much as $40 billion of shares in international giants such as Exxon Mobil Corp. and Royal Dutch Shell Plc. The Finance Ministry said it will study the proposal and decide what to do in “fall of 2018” at the earliest.

Big Oil is under pressure, read more here

While the fund says the plan isn’t based on any particular view about the future of oil prices or the industry as a whole, it will likely add to pressure on producers already struggling with the growth of renewable energy supplies. The Stoxx Europe 600 Oil and Gas index reversed gains after the announcement, sliding 0.3 percent as of 3:47 p.m. in London.

Built on the income that western Europe’s largest energy supplier has generated for more than 20 years, the fund’s investment decisions are guided by ethical rules encompassing human rights, some weapons production, the environment and tobacco. Norway’s fossil-fuel investments are coming under increasing scrutiny from a public that aims to be a climate leader without jeopardizing one of the world’s highest standards of living.

The fund has doubled in value over the past five years and was just given the go-ahead to boost its stock holdings to 70 percent of its portfolio from 60 percent to help drive returns.  The government, which also controls Statoil ASA and offshore oil and gas fields, was forced to withdrew cash from the fund for the first time last year to meet spending commitments after oil prices dropped.

‘Good Time’

Matsen said “now is a good time” for the proposal because otherwise the new 70 percent threshold will result in the fund buying even more oil and gas shares because it tracks indexes that include such stocks. The fund has a small amount of leeway to make individual investments and wants to keep oil and gas in its “investment universe,” he said.

The fund said it doesn’t expect returns or market risk to be affected “appreciably” by its proposal, emphasizing that cutting exposure to the energy industry would allow it to crank up investments in other sectors. Finance Minister Siv Jensen said the government will give the plan careful thought.

“This must be thoroughly assessed, I am not prepared to conclude in advance,” said Nikolai Astrup, leader of the finance committee representing the ruling Conservatives. “It’s important that the fund is managed in a way that’s predictable and long-term.”

But environmental groups praised the plan. “The world is changing fast, and it’s very risky to put too many eggs in the same basket,” said Marius Holm, the leader of the Zero Emission Resource Organisation. Sony Kapoor, a former adviser to Norway’s government, said the plan is “a belated victory for common sense over the powerful oil and gas lobby in Norway,” calling on the fund to now boosts its “green” investments at least tenfold.

The recommendation also received backing from the Conservative-led government’s support parties, the Christian Democrats and Liberals. The Labor Party, the biggest opposition group, said it would like to study the proposal before making a decision.

“The government is responsible for the Norwegian economy as a whole and must take a broad and comprehensive approach to this issue,” Jensen said in a statement.

(JN) Norges Bank reforça nos CTT

(JNNuma sessão que coincidiu com novos mínimos na cotação da empresa postal, o banco central norueguês reforçou a sua posição nos Correios através de instrumentos financeiros, detendo agora mais de 3% da empresa postal.

O Norges Bank reforçou a sua posição no capital dos CTT, passando de deter 2,22% para 3,15%, entre direitos de voto associados a acções e detidos através de instrumentos financeiros.

Segundo um comunicado colocado esta segunda-feira, 6 de Novembro, no site da Comissão do Mercado de Valores Mobiliários (CMVM), o limiar superior a 2% na percentagem de direitos de voto detidos através de instrumentos financeiros ocorreu no passado dia 3 de Novembro, sexta-feira.

Assim, o banco central norueguês passou a deter uma posição de 2,44% através destes instrumentos financeiros (contra os 1,11% anteriormente detidos por esta via) e uma de 0,71% de direitos associados a acções. Neste caso, houve uma redução face aos 1,11% antes detidos por via de títulos.

No que diz respeito aos instrumentos financeiros, a empresa detalha que 2% da participação ocorre através de acções em empréstimo com direito de recompra e 0,44% está ligada a contratos diferenciais (CFD).

A alteração ocorreu na última sessão da semana passada, em que os CTT prolongaram as quedas dos dias anteriores (recuando 5,84% para 3,561 euros), motivadas por resultados decepcionantes apresentados pela empresa postal e pela redução de dividendo que a levaram a tombar mais de 20% em bolsa dois dias antes.

Os dias que se seguiram aos resultados tiveram também impacto na aposta na descida de títulos por parte de gestoras como o JPMorgan, o Marshall Wace, a BlackRock e a Connor, Clark & Lunn Investment Management, que em conjunto acumulam posições curtas de 3,38% do capital dos Correios, avançou esta segunda-feira o Negócios.

Esta segunda-feira a empresa liderada por Francisco Lacerda (na foto) encerrou pela quinta sessão consecutiva no vermelho, a renovar um mínimo histórico de 3,447 euros, recuando 3,2%.

(Reuters) Norway’s sovereign wealth fund celebrates “stunning” $1 trillion value

(Reuters) The value of Norway’s sovereign wealth fund officially hit $1 trillion (740 billion pounds) early on Tuesday after outperforming all initial expectations, its manager said in a statement.

“I don’t think anyone expected the fund to ever reach $1 trillion when the first transfer of oil revenue was made in May 1996,” said Chief Executive Officer Yngve Slyngstad of Norges Bank Investment Management, which operates the fund.

“Reaching $1 trillion is a milestone, and the growth in the fund’s market value has been stunning,” he added.

A Reuters calculation, based on the fund’s own live valuation on its website, had previously shown the fund hit the trillion-dollar mark on Sept. 12.

(Reuters) Exclusive: Norway plans tax breaks for remotest Arctic oilfields – letters

(Reuters) Norway’s government plans to make taxpayers rather than oil companies pay special U.N. fees for any offshore production from remote Arctic regions, according to letters sent to oil firms and seen by Reuters.

The plan could serve as an example for other nations looking to fund exploration of the seabed ever further from land.

It was criticized by opposition parties that want tighter limits on exploration in the fragile Arctic environment, days before an election in which the future of Norway’s big offshore oil and gas sector is a major issue.

Opinion polls show a neck-and-neck race between Conservative Prime Minister Erna Solberg’s center-right block and center-left parties headed by Labour leader Jonas Gahr Stoere.

“There is too little risk on the companies, and too much risk on the people of Norway,” said Ola Elvestuen, the head of parliament’s Energy and Environment committee and a member of the small Liberal Party.

“Neither me, nor the committee were informed about this,” he said of the plans, outlined in letters provided to Reuters by the Oil and Energy Ministry, for implementing a dormant provision of the 1982 U.N. Convention on the Law of the Sea.

Under Article 82 of the treaty, rich nations are due to pay up to 7 percent a year of the value of any production — of oil, gas or other minerals — from their continental shelves more than 200 nautical miles (370 km) from land to a fund to help developing nations.

The money would be channeled to poor nations via the United Nations’ International Seabed Authority in Jamaica. The mechanism is untested as there is no production so far offshore.

The Oil and Energy Ministry included a warning about Article 82 when it offered parts of the Arctic Barents Sea, more than 200 nautical miles from land, for exploration in the latest licensing round awarded in 2016.

“The licensees could be required to cover certain costs in this connection,” it wrote in the letters to oil companies. “Any such cost will be deductible in the calculation of the petroleum tax.”

DRILLING

The ministry viewed the deductions as matching Norwegian petroleum policy, which includes a principle that “an investment project that is profitable before tax is also profitable after tax,” an official source said.

Last month, Statoil and partners Chevron, ConocoPhillips, Lundin Petroleum, and Petoro drilled the first well in the Arctic Korpfjell prospect, 410 km from the nearest land.

They found only small, non-commercial quantities of natural gas, but Statoil plans more drilling in the area in 2018.

The government has also offered three additional blocks behind the 200 nautical miles threshold in upcoming licensing rounds, with awards expected in 2018.

Of the 166 nations that have ratified the Law of the Sea, Norway has apparently gone furthest in outlining how it would apply Article 82, legal experts said.

The United States, which has not signed up, tells bidders for oil and gas leases far offshore in the Gulf of Mexico that they might be at risk of extra charges if Washington were to join.

“Norway and the United States are the only two countries that have spent any time talking about Article 82,” said Wylie Spicer, a Canadian legal expert who has written reviews of Article 82 for the United Nations.

John Norton Moore, a law professor at the University of Virginia who helped draft Article 82, said Oslo was trying to balance the interests of its citizens, oil companies and developing nations.

“This strikes me as a sound decision by Norway. It recognizes that it is an obligation of the state” to pay any charges under Article 82, he said.

He said it was reasonable to give oil companies tax breaks for taking on the risks of operating so far from land. Article 82 makes states responsible for payments but lets them decide how to raise the cash.

OPPOSITION CRITICISM

Rasmus Hansson, the only member of parliament for the opposition Green Party and a member of the Energy and Environment Committee, criticized the government plan.

“This is yet another round of subsidizing Norway’s future contributions to global warming with taxpayers’ money,” he said.

Environmental group Greenpeace also criticized the plan, saying that oil and gas in the high north was simply too risky. “There is no anchor in the democratic process,” said Truls Gulowsen, leader of Greenpeace Norway.

Legal scholars say Article 82 is based on the idea that the high seas, owned by no nation, usually start 200 nautical miles offshore, the limit of each country’s exclusive economic zone (EEZ).

Article 82 lets rich nations exploit resources beyond their EEZs in offshore areas where, such as in Arctic Norway, a shallow continental shelf extends beyond 200 nautical miles.

Under Article 82, countries will have to start paying 1 percent of the value or volume of any production after five years, with the annual rate rising to a plateau of 7 percent after 12 years.

Norway’s parliament debated and ratified the Law of the Sea in 1996, and included an assessment that any application of Article 82 was unlikely to have a big economic impact.

+++ P.O./V.V.I (FT) Fed told public spending can lift ailing economies

P.O.

Portugal has beaten the Zombies!

It has been presented at Jackson Hole as validated research.

FED told public spending can lift ailing economies even in countries with a high ratio of debt to GDP.

This is precisely what Portugal did with a resounding success.

Quod erat demonstrandum!

It took a small in size Country, but big and great in everything else like Portugal to show the World that the conventional theory was wrong.

Actually you know what…?

Portugal or maybe it’s Finance Minister Professor Mario Centeno together with the Prime Minister Mr Antonio Costa should win The Nobel Memorial Prize in Economic Sciences (officially Swedish: Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne, or the Swedish National Bank’s Prize in Economic Sciences in Memory of Alfred Nobel), commonly referred to as the Nobel Prize in Economics.

I’s an award for outstanding contributions to the field of economics, and generally regarded as the most prestigious award for that field.(Wikipedia)

I can’t think of anything more outstanding than this, in these times.

For the record I am an Economist.

Francisco (Abouaf) de Curiel Marques Pereira

Fed told public spending can lift ailing economies

By Sam Fleming in Jackson Hole, Source: FT.com

Ramping up public spending in a flailing economy can improve a country’s fiscal health even when public debt is already high, according to research that raises hopes that governments have greater scope to battle future downturns.

Alan Auerbach and Yuriy Gorodnichenko of the University of California Berkeley, presented research at Jackson Hole, Wyoming, that counters the view that countries should be clamping down on spending in recessions for fear of driving up their indebtedness.

Central bankers meeting in at the Kansas City Fed’s annual symposium have been discussing a range of topics beyond their traditional realm of monetary policy, examining trade, income distribution, and the impact of technology as well as fiscal policy. While the recovery is becoming increasingly widespread geographically, debate at the conference, entitled “Fostering a Dynamic Global Economy,” has reflected an underlying concern that widening inequality and social tensions could trigger hazardous policy choices, including a dash to protectionism.

The research presented on Saturday looks at the effects of shocks to public spending on debt and other measures of “fiscal pressure” such as interest rates and credit default swaps.

“These results suggest that fiscal stimulus in a weak economy could be an effective tool to boost the economy and that the penalty from doing so in terms of elevated debt levels and borrowing costs is likely modest for the countries we study,” the two authors wrote. “Indeed, fiscal stimulus in a weak economy can improve fiscal sustainability along the metrics we study.”

The findings come as central banks confront the possibility that they will enter the next recession with little monetary firepower given benchmark interest rates remain so low – meaning there may be more pressure on governments to help by loosening tax and spending policies.

With government debt in the US already at 77 per cent of GDP and heading higher many conservative lawmakers are calling for urgent action to pare back the public sector. They would be likely to balk at signing up to a big fiscal stimulus if a new recession struck, yet the paper suggests that would be a poor decision.

Jason Furman, the former chair of Barack Obama’s Council of Economic Advisers who is now at Harvard, responded to the paper with a simple conclusion: “We have been giving catastrophically bad advice to countries with high debt to GDP ratios.”

Looking at data starting in the 1980s, the researchers found that expansionary fiscal policies adopted when the economy is struggling may not only stimulate economic growth, but also reduce debt-to-GDP ratios as well as interest rates and CDS spreads on government debt.

The report supports conclusions by a number of academic papers in recent years, including from Larry Summers, the former Treasury Secretary, and J. Bradford DeLong, another UC Berkeleyprofessor, who in 2012 argued fiscal efforts in downturns can effectively pay for themselves.

The authors of the new paper cautioned that they are not making an unconditional argument for stimulus. “The experience of Greece and other countries in Southern Europe is a grave warning about the political risks and limits of fiscal policy. Bridges to nowhere, “pet” projects and other wasteful spending can outweigh any benefits of countercyclical fiscal policy.”

Most big advanced economies have seen rising debt-to-GDP ratios since 2007, raising worries about their ability to use fiscal stimulus to counter a future recession. In the US, the Congressional Budget Office estimates that debt held by the public will rise to 91 per cent of GDP, or $26 trillion, by 2027. At that level, debt held by the public would be the largest since 1947.

Copyright The Financial Times Limited 2017

(c) 2017 The Financial Times Ltd. All rights reserved. Please do not cut and paste FT articles and redistribute by email or post to the web.

 

(JN) Fundo soberano da Noruega reforça posição no BCP

(JNEm nota enviada à CMVM, o BCP informa que o Norges Bank reforçou a posição detida no banco liderado por Nuno Amado. O fundo soberano da Noruega detém agora 2,745% do capital do BCP.

Fundo soberano da Noruega reforça posição no BCP

O BCP informou esta quarta-feira, 28 de Junho, a Comissão do Mercado de Valores Mobiliários (CMVM) de que o Norges Bank reforçou a posição detida no capital social do banco liderado por Nuno Amado.

Na nota enviada ao regulador, o BCP refere que após uma transacção realizada no passado dia 26 de Junho, o fundo soberano da Noruega passou a deter 2,745% do maior banco privado português. Antes desta operação, o Norges Bank era detentor de 2,614% do BCP.

 

No entanto, a participação directamente detida pelo fundo soberano norueguês foi reduzida, de 2,002% para 1,866%, uma fatia abaixo do patamar que estabelece uma participação qualificada.

 

Em sentido inverso, a participação no BCP de instrumentos financeiros controlados pelo Norges Bank subiu dos 0,613% que se verificavam antes da última transacção para 0,880%.

Ao longo dos últimos meses o Norges Bank vem realizando com regularidade transacções de títulos accionistas do BCP, ora reforçando a posição detida no banco português, ora reduzindo-a.

 

Sendo certo que os mais de 2,5% do capital social controlado pelo fundo norueguês garantem a esta instituição o estatuto de um dos maiores accionistas do BCP, abaixo da Fosun, da Sonangol e do grupo EDP.

(JN) Norges Bank volta a reforçar no BCP

(JNO banco central da Noruega tem agora uma posição qualificada de 2,645% no capital no maior banco privado português.  

Norges Bank volta a reforçar no BCP
O Banco Comercial Português anunciou esta segunda-feira, 12 de Junho, que o Norges Bank voltou a reforçar a posição no banco, detendo agora 2,645% do capital.

Em comunicado, o BCP refere que este reforço de posição surge depois de uma “transacção efectuada no dia 7 de Junho de 2017”. Nesse dia as acções do BCP fecharam a sessão a cair 2,78% para 0,227 euros.

Apesar deste reforço de posição, a posição do banco central da Noruega no capital do BCP é quase idêntica à registada anteriormente. O banco português informou recentemente que a 25 de Maio o Norges Bank detinha uma participação de 2,63% e a após operações realizadas a 19 e 22 de Maio, detinha 2,6%.

No início do mês passado o Norges Bank já detinha uma posição de 2,64% no BCP, depois de ter comprado acções um dia depois da apresentação de resultados do primeiro trimestre.

O Norges Bank, que passou a ter uma participação qualificada (acima de 2%) no BCP em Fevereiro, consolida assim o estatuto de um dos maiores accionistas do BCP, ficando a par da EDP e atrás da Sonangol e da Fosun.

(CNBC) Norway ranked world’s happiest country as the US gets sadder

(CNBC)

Norwegian fans celebrate

Forget buying that new car, opt for a scarf and gloves and head to Norway if you want to achieve true happiness, a new report suggests.

Renowned for its good public services, political stability and enviable gene pool, Norway can now also claim pole position as the happiest country on earth, having risen in the ranks to surpass Denmark and claim first place in this year’s World Happiness Report.

The study, which measures social factors alongside economic data, points to the limitations of financial factors in achieving happiness. Therefore, Norway vaulted ahead despite its economy being hit by the plummeting oil price, meanwhile happiness in the U.S. continues to wain despite incomes increasing.

“This report gives evidence that happiness is a result of creating strong social foundations. It’s time to build social trust and healthy lives, not guns or walls. Let’s hold our leaders to this fact,” said Jeffrey Sachs, director of the Sustainable Development Solutions Network, which produced the report in association with the United Nations.

Norway sped ahead from fourth place last year to steal the top spot in the annual rankings, which combine economic, health and polling data on approximately 3,000 respondents in each of more than 150 countries. It is joined in the top five by fellow Nordic states Denmark, Iceland, Finland and central Europe’s Switzerland, which averaged a comparable happiness level of 7.5 out of 10.

The Netherlands, Canada, New Zealand, Australia and Sweden were also placed in the top 10.

The U.S.’s happiness has slipped over the past year, however, the report suggests. Despite rising wages, overall happiness has fallen from 13th position globally to 14th, pointing to a need for a more comprehensive approach from government, the report suggests.

“The predominant political discourse in the United States is aimed at raising economic growth, with the goal of restoring the ‘American dream’ and the happiness that is supposed to accompany it. But the data show conclusively that this is the wrong approach,” said Sachs, in a section of the report entitled “Restoring American Happiness”.

Income per person has increased roughly three times since 1960, but measured happiness has not risen – indeed, it has dipped over the past decade from 7.5 out of 10, to 6.8 out of 10.

“The United States can and should raise happiness by addressing America’s multi-faceted social crisis— rising inequality, corruption, isolation, and distrust—rather than focusing exclusively or even mainly on economic growth, especially since the concrete proposals along these lines would exacerbate rather than ameliorate the deepening social crisis.”

The comments follow a recent speech by Helen Clark, head of the UN Development Program (UNDP), in which she spoke out against the “tyranny of GDP (gross domestic product)”, arguing that quality of growth is more important.

The U.S. ranked just ahead of Ireland, which took 15th place, and was followed by Germany in 16th, the U.K. in 19th and France in 31st.

However, economic factors remain a certain contributor to achieving social cohesion and overall happiness, the report finds. The ten bottom spots were taken by some of the world’s poorest countries, with happiness levels averaging approximately 3 out of ten.

These included Yemen, South Sudan, Liberia, Guinea, Togo, Rwanda, Syria, Tanzania, Burundi and Central African Republic.

(ECO) As 5 apostas do fundo soberano da Noruega em Portugal

(ECO) É o maior fundo soberano do mundo. A sua presença no mercado acionista é colossal. Google, Apple, Nestlé, JP Morgan fazem parte das eleitas dos Norges Bank. Mas onde é que investe em Portugal?

Nestlé, Shell, Apple, Google, Microsoft, JP Morgan, Amazon.com, Exxon… não faltam estrelas mundiais na carteira de investimentos do maior fundo soberano do mundo. O Norges Bank tem aplicados muitos milhões em quase 9.000 empresas espalhadas por 77 países. A sua presença no mercado acionista é absolutamente estonteante: o fundo detém 1,3% de todas as cotadas do mundo e 2,3% das cotadas europeias. E em Portugal?

O Norges Bank reduziu a sua exposição ao mercado acionista nacional. Ainda assim, não deixa de assumir um protagonismo interessante em muitas das nossas cotadas. Onde é que ela está presente?

+++ (BBG) Norway Central Bank Chief Warns of ‘Sharp’ Drop in Wealth Fund

(BBG)

Oystein Olsen.

Photographer: Krister Soerboe/Bloomberg

Norway’s central bank governor sharpened his warning on rising spending of oil revenue as he drew up scenarios for a 50 percent loss of capital over the next 10 years for the world’s biggest sovereign wealth fund.

Governor Oystein Olsen said that the continued rise in oil cash spending, which now accounts for about 20 percent of the budget and 8 percent of gross domestic product, must now be halted to protect the $900 billion fund, the world’s largest sovereign pool of cash.

“With a high level of oil revenue spending, there’s a risk of a sharp reduction in the fund’s capital,” Olsen said in the traditional Annual Address in Oslo Thursday. “This could, for example, happen if a global recession triggers both a decline in oil revenue and low or negative returns on the fund’s capital.”

Government withdrawals from the fund are estimated to jump about 25 percent this year after an historic first outflow last year. The Conservative-led government was last year forced to dip into the oil fund for the first time to cover budget needs and protect the economy amid a plunge in oil prices.

While the fund, which is overseen by the central bank, so far has said it’s more than able to handle outflows without selling assets, Olsen’s speech did lift the lid to reveal some of the worst case scenarios being calculated by the investor.

For example, it sees a 1 percent chance of a 50 percent decline over 10 years if spending is kept at the current level of about 3 percent of the fund. If spending is raised to 4 percent that probability rises to about 5 percent. If the fund’s allocation to stocks is boosted to 75 percent from 60 percent, which is currently being discussed, the probabilities rise even further to about 2 percent and 6 percent, respectively.

“This shows what you may risk if you increase oil spending from today’s level,” Olsen said in a separate interview. “This helps us to strengthen the message.”

The warning came in an embargoed speech and interview, which were later amended after the government on Thursday announced it was tightening the 16-year-old fiscal policy rule to 3 percent of the fund’s value from 4 percent, capping spending of oil revenue. The minority government will need backing in parliament for the change, which will have little immediate effect since oil money spending has held at or below 3 percent since 2014.The government also proposed to raise the stock portion in the fund to 70 percent from 60 percent to help generate higher returns.

While the proposed changes are reasonable it’s more important to look at spending as a percentage of gross domestic product, Olsen said.

That could serve to discipline politicians. “Whether you call it a ceiling must be up to the politicians, they must design a new fiscal guideline for the long term,” Olsen said. “But I warn against following a path that mechanically gets you to a higher level.”

Olsen offered few clues on monetary policy, while reiterating that the most “pessimistic scenarios” from the oil plunge haven’t materialized. Fiscal spending and monetary policy have both played a part in saving the economy, he said. He has previously signaled that he’s done with cutting rates after hitting a record low of 0.5 percent, in part due to concerns about surging property prices.

“It must be recognized, however, that the longer-term challenges facing the the Norwegian economy can’t be resolved by spending more oil revenue and keeping interest rates low,” he said in the speech, arguing the Norwegian economy needs more legs to stand on.

(BBG) Norway Fund Needs to Add $87 Billion in Stocks, Paper Shows

(BBG)  Norway’s $874 billion wealth fund needs to add more stocks as record low interest rates and a slow global expansion weigh on returns, a government-appointed commission recommended.

The Finance Ministry should raise the fund’s stock mandate to 70 percent from 60 percent, the committee, comprised of academics, investors and two former finance ministers, urged on Tuesday. A decision on increasing its stock investments will be made by the ministry, which hasn’t always agreed with the conclusions of similar reviews on the fund’s holdings.

“A higher share of equities increases the expected return, and the contribution to the fiscal budget, but also entails more volatility in the value of the Fund and a higher risk of a decline in its long-run value,” the group said. “The majority is of the view that the this risk is acceptable, provided that there is political will and ability to adapt economic policy to the accompanying increase in risk, in both the short and long run.”

Norway is looking for ways to boost returns that have missed a real return goal of 4 percent as interest rates have plunged globally in the aftermath of the financial crisis. The government is this year withdrawing money from the fund for the first time to make up for lost oil income after crude prices collapsed over the past two years.

‘The 60 percent equity share has over time been very good for us because it has given us considerable income from the fund,” Finance Minister Siv Jensen said in an interview after a press conference. “But we have also experienced that there can be swings from one year to another because the stock market moves over time.”

‘Considerably Less’

After getting its first capital infusion 20 years ago, the fund has steadily added risk, expanding into stocks in 1998, emerging markets in 2000 and real estate in 2011 to safeguard the wealth of western Europe’s largest oil exporter.

It’s currently mandated to hold 60 percent in stocks, 35 percent in bonds and 5 percent in real estate. After inflation and management costs, it has returned 3.43 percent over the past 10 years.

The committee said that the expected returns from the fund are now “considerably less” than 4 percent. With the current equity share, the commission predicts an annual real return of just 2.3 percent over the next 30 years.

Still, that didn’t stop the chairman of the commission, Knut Anton Mork, from disagreeing with the majority’s conclusion. The former chief economist at Svenska Handelsbanken in Oslo instead recommended cutting the stock holdings to 50 percent.

“The minority recognizes that the reduction in the oil and gas remaining in the ground over the last decade is an argument in favor of a higher equity share, but considers this less important than the predictability of budget contributions from the fund,” he said.

(OBS) Noruega constrói barreira fronteiriça para evitar entrada de refugiados

(OBS) A Noruega está a construir uma barreira de ferro na fronteira com a Rússia a partir de Storskog. Uma medida que o ministro-adjunto da Justiça descreve como “responsável”.

No ano passado, passaram pelo posto fronteiriço de Storskog 5.500 refugiados

A Noruega está a construir uma barreira de ferro na fronteira com a Rússia, no norte do país, de modo a impedir a entrada de refugiados no país, depois do grande fluxo de migrantes registado no ano passado.

Após a conclusão, a barreira irá medir 200 metros de comprimento e começará no posto fronteiriço de Storskog. Terá uma altura de 3,5 metros. De acordo com a Reuters, os primeiros trabalhos de limpeza e construção já estão em andamento e deverão ficar concluídos nas próximas semanas. O objetivo é que o muro fique pronto antes do inverno, dificultando a entrada de refugiados pela floresta.

Em 2015, 23 mil pessoas, a maioria sírias, pediram o estatuto de refugiado na Noruega. Dessas, mais de cinco mil entraram por Storskog. No primeiro trimestre de 2016, o número aumentou 95%. Ove Vanebo, ministro-adjunto da Justiça, garantiu à Reuters que o muro não passa de uma “medida responsável” que pretende controlar o fluxo de refugiados no país. Uma opinião que não é partilhada por todos.

“Não precisamos de uma barreira”, disse à agência de notícias Rune Rafaelsen, presidente da câmara de Soer-Varanger, por onde passará o muro. “Existem demasiadas barreias hoje em dia na Europa“, disse, citando o caso da Hungria.

Já Lino Landro, do grupo Refugees Welcome, garante que a Noruega tem a obrigação de “ser um país para onde as pessoas podem fugir”. “A barreira envia um sinal negativo, incluindo para a Rússia, porque diz que ‘não confiamos em ti’.”

(ZH) Norway Raids Sovereign Wealth Fund To Cover Government Expenses

(ZHSaudi Arabia isn’t the only oil-dependent nation struggling to make ends meet in the wake of weak oil prices.  For the first time since its establishment in 1996, the Norwegian government is starting to withdraw money from its sovereign wealth fund to cover government expenses.  In fact, in the first half of 2016 the government has withdrawn $5.4 billion.  Moreover, withdrawals are expected to accelerate in 2H 2016 reaching nearly $20 billion, a run-rate that would have them exceeding the fiscal limits imposed on fund withdrawals of 4% of assets, or $36 billion.  To put those withdrawals into perspective, Norway’s economy is roughly $375 billion and federal spending accounts for roughly 60% or $225BN.  Therefore, a $20BN withdrawal in 2H 2016 represents roughly 18% of total government spending.

Norway Sovereign Wealth

 

In an interview with Bloomberg, Egil Matsen, the Deputy Governor at Norway’s Central Bank, said the withdrawals are starting to impact the manner in which the fund manages its risk profile.   

Relevant for how we think about the risk-bearing capacity of the fund.  Say you have a decline in the equity market, and these returns have been partly funding the government, do you want variations in international financial markets to have a direct impact on fiscal policy?

Matsen, among others, has also questioned whether the 4% fiscal limits on withdrawals are the right cap in the current return environment noting that “as the older bonds come to maturity and are reinvested, a big chunk of that will be reinvested in bonds with very low or even negative yields.” 

Matsen also noted that the economic landscape has “changed” since their last review in 2007.  Well, that might just be the understatement of the year.  In response to that changing economic landscape, Matsen said that fund managers are doing a lot of “internal analytical work” to figure out whether the “correlation structure between equities and bonds has changed since 2007.”  Seriously?

“We’re doing a lot of internal analytical work now to assess how the economic landscape has changed since the last review of this in 2007,” he said. “It’s a different world. It’s way too early for me to give any preview of our advice, but that’s certainly a big and important decision.”

 

The fund is also looking at whether the “correlation structure” between equities and bonds has changed since 2007, Matsen said. “There may be data that suggests there’s a different pattern there than in 2007.”

Well, we think you might be on to something with the “thesis” that the “correlation structure” between equities and bonds has shifted since 2007.  The fact that equities and bonds are now both trading at all-time highs is a dead give away.  In fact, we can save you some time with that “internal analytical work” because, per the chart below, everything is now perfectly correlated…so you can just buy whatever you want really…as long as you buy. 

Correlation

 

But, certainly updating your view of the “economic landscape” once every 9 years or so is important.  Better late than never.

(Reuters) Norway’s PM softens stance on Britain joining EFTA

(Reuters)

Norwegian Prime Minister Erna Solberg said she saw some advantages if Britain joined the four-nation European Free Trade Association (EFTA) after quitting the EU, qualifying past doubts about British membership.

Solberg also said in an interview with Reuters that Britain’s 65 million people would radically change EFTA, which now comprises Norway, Switzerland, Iceland and Liechtenstein with a combined population of just 14 million.

Prime Minister Theresa May is undecided about her country’s future role in Europe after Britons voted to leave the European Union in a June referendum.

One option could be to join EFTA, which Britain helped found but quit to enter the EU in 1973, though it is far from clear that is a path that Britain wants to follow.

“It’s easy to see some advantages of British membership. It’s a big country with a big economy,” Solberg said.

But that benefit of more clout also means Britain might demand conditions that would mainly help it – rather than its putative EFTA partners – when negotiating trade deals.

“Some countries will probably think it’s fine to have a free trade deal with us (EFTA), but won’t necessarily think that it’s equally simple to have a free trade deal with Britain,” she said.

EFTA has about 30 free trade deals with nations including Canada, Chile, Morocco and Singapore.

Solberg cited farming as one example of a possible conflict of interest. Britain exported food and drink worth 18 billion pounds ($24 billion) in 2015 while Norway imposes high import barriers to protect farmers in a country that stretches into the Arctic.

“I don’t think that the EFTA path is necessarily the way Britain should be interested in going,” she said.

She said her Conservative Party was in “continuous dialogue” with their peers across the North Sea led by May, whose first weeks in office have been dominated by a debate over the terms and timing of Britain’s divorce from the EU.

Overall, Solberg’s comments were less skeptical about British membership than shortly after Britain’s vote, when she stressed that it would “change the balance of power in EFTA”.

That variable picture has parallels within the EU, where Germany has held out the prospect of granting Britain a special status in its post-Brexit relationship while France has pushed for a more hardline approach.

Within EFTA, all member countries have to approve new members, giving each a theoretical veto.

“It would be wrong to flag a veto or no veto now, and I believe anyway that we will find good solutions to these problems,” Solberg said.

She said it was important for all countries to set out their national interests in the debate. “Then all must be prepared for anything, if it turns out that Britain joins EFTA,” she said.

Alongside being members of EFTA, Norway, Iceland and Liechtenstein also have free movement of goods, services and people with the 28-nation EU. Switzerland is outside that deal.

(Politico) Norway dampens UK hopes on post-Brexit status

(Politico) Norway’s minister for European affairs has expressed reservations about letting the U.K. into the European Free Trade Association, often suggested as one of Britain’s prime alternatives to EU membership.

EFTA is a regional trade grouping that includes Norway, Iceland, Liechtenstein and Switzerland. It is part of the European Economic Area, an economic partnership that allows free movement of persons, goods, services and capital within its members (EFTA plus the EU).

“It’s not certain that it would be a good idea to let a big country into this organisation,” Elisabeth Vik Aspaker told the daily Aftenposten. “It would shift the balance, which is not necessarily in Norway’s interests,” she added.

If the U.K. became a member of the European Free Trade Association it would retain access to the EU’s single market, but at the same time would have to pay a hefty budget contribution to Brussels (possibly just 17 percent less than what it does now) and accept free movement of people.

Among the different options that have being flagged as a possible alternative for a future relationship between the U.K. and the EU, so-called EEA option has gained ground and has been described as the most realistic by several academics and commentators. But there is a problem: a country can join the European Economic Area only as a member of the European Union or a member of EFTA.

If Britain leaves the EU, and Norway is openly expressing doubts about London joining EFTA, there might be little hope left for the U.K.

A lawyer with close knowledge of EFTA and EEA issues, who asked not to be named due to the sensitivity of the issue, told POLITICO: “It is technically possible for the U.K. to join EFTA, but it is certainly not the shortcut some people have made it to be. A country can join the European Economic Area as a member of the EU or EFTA, so if the U.K. leaves the EU but wishes to have continued access to the EEA it would first have to apply for EFTA membership and that might take some time.”

(Reuters) Google buys 12-year output from Norwegian wind power farm

(Reuters) Google has bought the entire 12-year power production from a yet-to-be-built Norwegian wind power farm to supply its European data centers with renewable energy, its developers said on Thursday.

Norway’s Zephyr and Norsk Vind Energi said the 160-megawatt capacity onshore Tellenes wind power farm south of Stavanger is expected to be fully operational in late 2017, and when built it would become the largest wind power farm in the Nordic country.

“Google has been carbon-neutral since 2007 and we are committed to powering 100 percent of our operations with renewable energy sources,” said Marc Oman, EU Energy Lead, Google Global Infrastructure.

“Today’s announcement, Google’s first wind power deal in Norway and the largest to date in Europe, is an important step towards that commitment,” he added.

Funds managed by BlackRock (BLK.N), the world’s largest asset manager, will provide equity financing for the project, the developers said in a statement.

The value of the deal was not disclosed.

(Reuters) Norway prime minister says EU should listen to dissatisfied voters

(Reuters)Norwegian Prime Minister Erna Solberg looks on during her visit to Gyeongbok Palace in Seoul, South Korea, April 14, 2016. REUTERS/Kim Hong-Ji

The European Union should recognize that many citizens in Britain and the EU are not satisfied with the direction of Europe, the Norwegian prime minister told broadcaster NRK on Friday.

“I believe they will listen to the signal from both the British voters and many other voters around Europe who feel that the EU is not providing good enough answers to today’s challenges,” Solberg said following the outcome of the Brexit vote.

Unlike Nordic neighbors Sweden, Denmark and Finland, Norway is not an EU member but has close ties to the union and has adopted its rules on free trade and other key provisions

 

(Istoédinheiro) Maior fundo de pensão da Noruega, KLP exclui Petrobras de todos os investimentos

(Isto é Dinheiro) O maior fundo de pensão da Noruega, o KLP Kapitalforvaltning, anunciou que a Petrobras foi excluída de todas as carteiras administrados pela casa. A corrupção na petrolífera e a persistência de “um risco inaceitável” de novos problemas fizeram os gestores excluírem a companhia brasileira. Para o KLP, “é vexatório ver que o desaparecimento de US$ 2 bilhões não gerou qualquer sinal de alerta” na direção da empresa.

Em comunicado aos cotistas, o KLP informou que decidiu excluir investimentos na Petrobras diante do caso de corrupção descoberto na empresa. “Por mais de 10 anos, os contratos da companhia com fornecedores foram regularmente inflados em 3%, com o adicional pago para políticos brasileiros, partidos políticos e membros da direção da empresa”, cita o comunicado do fundo de pensão. “Apesar das muitas iniciativas e do escrutínio público, a KLP continua preocupada porque há um inaceitável risco de corrupção futura na companhia”.

“A escala do caso, o tamanho dos montantes envolvidos e o período de tempo em vigor não têm paralelo em qualquer lugar no mundo. Há ainda muitas iniciativas que nós achamos que a companhia poderia adotar, incluindo uma investigação para potencial corrupção nas operações fora do Brasil, já que a empresa opera em muitos países com risco excessivamente alto”, cita a chefe de investimentos do KLP, Jeanett Bergan. O fundo tem carteira de 553 bilhões de coroas norueguesas – cerca de R$ 227 bilhões.

Segundo o fundo de pensão, a carteira possuía 33,7 milhões de coroas (cerca de R$ 14 milhões) em ativos da Petrobras em 11 de abril. A exclusão da Petrobras foi realizada em 1º de junho de 2016.

+++ V.I. (BBG) Brexit Drama Scares Off Biggest Nordic Private Equity Fund EQT

(BBG) EQT Partners AB, the biggest private equity fund in the Nordic region, says it’s steering clear of Britain as the country prepares to hold a vote on its European Union membership.

“Our industry hates uncertainty and we haven’t opened a fund there since the vote was announced,” Thomas von Koch, EQT’s managing partner, said in an interview on Monday at the firm’s Stockholm headquarters. “The U.K. is on ice for us.”

Thomas von Koch.
Thomas von Koch.
Photographer: Ruth Corke/EQT

Though most polls indicate the U.K. will probably stay in the EU after the June 23 vote, EQT is preparing for the worst, von Koch said. The fund doesn’t have any equity investments in Britain, but owns debt from U.K. companies through its credit fund, the 50-year-old managing partner said.

The threat of a so-called Brexit is already prompting some companies to shelve initial public offerings that would have targeted London. Both the International Monetary Fund and the Organization for Economic Cooperation and Development have warned Britain against leaving the EU amid concern an exit would cause financial shocks beyond the U.K.

Bloomberg’s latest poll of polls shows the “leave” camp at about 41 percent, compared with 48 percent for “remain,” but calculates an 82 percent probability the U.K. will still be an EU member after the June referendum.

Should Britons defy the polls and vote to leave, it’s worth noting that Ireland would suddenly become the last English-speaking country in the EU, von Koch said. Luxembourg would also stand to benefit, he said.

“I think the Irish and the Luxembourg people have the champagne cooling. They are clearly the winners,” von Koch said. “I sincerely believe it would be a very stupid decision for the Brits, because it’s going to hurt.”

Investors face a universe in which two — once unthinkable — events may become reality. One is Brexit, the other is a President Donald Trump, von Koch said. An ABC News/Washington Post poll published on Monday showed Trump getting 46 percent support, compared with 43 percent who would back Hillary Clinton.

“People are sitting on the bench, waiting to see if Brexit happens and Trump becomes president,” von Koch said. “It’s an interesting world that causes lots of uncertainty.”

The U.K. government issued its starkest warning yet about the dangers of a vote to leave the EU in next month’s referendum, saying it risks causing a yearlong recession, sparking a decline in the pound and costing the loss of about half a million jobs. The pound is already down about 5 percent against the euro this year.

Leaving behind the “noise” of the Brexit vote and the possibility of a Trump presidency, the underlying strength of Europe is “underestimated,” von Koch said. He held up France, Italy and Spain as countries that investors would do well to look at more closely.

EQT has raised about 29 billion euros ($32.5 billion) in capital spread over 18 funds since being founded in 1994. EQT invests in equity, infrastructure and credit. It is expected to soon start a technology growth fund to broaden its appeal to investors.