Norges Bank reduces investment in Portugal

Norges Bank has reduced the number of investments it has in Portugal, both in debt and in shares. But in a year of widespread appreciation, the value of its assets in the country remained close to 1.4 billion dollars (equivalent to 1.28 billion euros) at the end of 2019. The amount is divided between 20 investments in Portuguese shares and six in bonds.

In shares, the Norwegian sovereign fund abandoned one position: in Teixeira Duarte (where, at the end of 2018, it held 177.9 thousand euros), remaining a shareholder in 20 other companies, including 17 of the PSI-20. The only one left out is F. Ramada, reveals the annual report released this Thursday.

On the other hand, the preferred listed company of the fund is EDP, in which it holds 461.27 million dollars in shares (2.91% of the total capital of the electric company). In energy, Norges Bank also holds stakes in EDP Renováveis (27.8 million dollars) and REN (28.7 million dollars). The same did not happen with Galp Energia. In a year when the oil fund began to divest itself in the sector, it reduced its stake in the Portuguese oil company to 86.9 million (out of 152 million dollars). From 1.33%, it now has only 0.63%.

Among the remaining “heavyweights” of the Portuguese index, Norges Bank also divested in BCP, having now held only 1.25% of the bank’s capital (42.9 million, against 61.2 million in the previous year), in Nos (where it now holds 2.74% or 76.1 million) or in Mota-Engil (to 11.5 million or 2.31% of the capital).

Besides almost all those listed on the PSI-20, there are also companies trading on the PSI Geral that gained Norges Bank’s attention. This is the case of Sonaecom – of which Norges Bank holds 4.9 million (0.71%) – and Impresa – of which it has 396.5 thousand (1%). At the end of last year, Sonae Indústria was also part of the fund choices, holding a stake valued at 223 thousand dollars (0.5%).

Fund has less sovereign debt but entered the Azores

Although the largest sovereign fund in the world reduced the shareholder position in Portugal, the total value of equity investments remained practically unchanged thanks to the strong valuations of its holdings. Norges Bank earned 180 billion dollars (165 billion euros), which is equivalent to a return of 20% and represents the second best performance in its history.

On a global level, investment in the stock market has seen a return of 26%, outperforming other assets. This is the case of real estate (which the fund does not have in Portugal), which yielded 7%. Bonds yielded 8% in a year that was marked by a flood of debt whose price soared in line with negative yields.

In the bond market, Norges Bank also reduced in Portugal. At the end of 2019, it held six investments in bonds issued by Portuguese entities, which totalled 335.8 million. Most of it relates to public debt, which fell to 222.51 million, almost 100 million less than the previous year. Despite having reduced the amount of bonds issued by the State, the fund went into the placement of debt made by the Azores (with State guarantees) with 22.8 million.

Among other bond investments, the fund also held debt from Caixa Geral de Depósitos (17.4 million), Caixa Económica Montepio Geral (50.9 million) and BPI (12.5 million). In the debt segment of financial institutions, the fund left Santander Totta. With regard to public companies, there were also reductions: Norges Bank ceased to be a CP – Comboios de Portugal and IP – Infraestruturas de Portugal bondholder, remaining only in Parpública, where it holds 9.7 million in bonds.