Tailwind from strong global markets
Norway's portfolio investments abroad amounted to NOK 10 235 billion at end-2017, an increase of 12 per cent from end-2016. Investments in Sweden and China stood out with a solid growth in 2017.
A positive development in world financial markets contributed to the rise in Norway's total portfolio investments abroad by NOK 1 096 billion from end-2016 to end-2017, according to updated figures from Portfolio investment abroad.
A leap for Asian markets and Sweden
Strong share price growth characterised the year of 2017 in Asian stock markets, among others. This growth, combined with net purchases of securities, contributed to an increase in portfolio investments in China by NOK 67 billion to NOK 202 billion by the end of the year. Japan is still the most important single country in Asia for Norwegian investors.
During the same period, Norway's total portfolio investments in Sweden increased by NOK 102 billion to NOK 443 billion at the end of the year. Of this increase, NOK 73 billion can be attributed to investments in bonds. Norwegian banks' purchases of Swedish debt securities are the main reason for larger stocks of securities in 2017.
Figure 1. Investments in selected countries
Change in the portfolio composition
The distribution of the asset classes equity and debt securities was 64 and 36 per cent respectively at end-2017, compared to 60 and 40 per cent at end-2016. This shift in composition is mainly due to a change in the Government Pension Fund Global investments’ mandate on 1 January 2017.
Figure 2. Asset allocation over time
The Government Pension Fund Global was the largest investor
The government sector, with the Government Pension Fund Global as the dominant investor, was the largest contributor, with NOK 8 372 billion in portfolio investments. Despite a net withdrawal from the fund by the Norwegian government in 2017, government investments increased by 13 per cent. A positive development in world financial markets and a moderate weakening of the Norwegian currency contributed to this.
Figure 3. Total portfolio investments compared with Central Government
|Portfolio investment, total||2721||2944||3663||3757||4283||4442||4996||6413||7904||9066||9136||10235|