Norway fund plans to more than double investments in Saudi Arabia

Norwegian sovereign wealth fund (SWF) CEO Yngve Slyngstad in this 2017 file photo. (Reuters/File Photo)
Updated 26 October 2018

Norway fund plans to more than double investments in Saudi Arabia

  • Norway's sovereign wealth fund, the world's largest, plans to more than double its investments in Saudi Arabia
  • The fund currently has Saudi Arabian assets worth $825 million

OSLO: Norway's sovereign wealth fund, the world's largest, plans to more than double its investments in Saudi Arabia after it is included in the fund's reference index soon, Chief Executive Yngve Slyngstad said on Friday.
The fund currently has Saudi Arabian assets worth 6.9 billion crowns ($825 million), spread over 42 companies including banks, petrochemicals and healthcare firms.
The fund's reference index, the FTSE, will include Saudi Arabia in the coming year.
"We invest in companies, not countries. Our investments in companies based in Saudi Arabia will not be changed based on political developments," Slyngstad told Reuters.
"Generally speaking, we are not set up to assess political risk."
Earlier, the $970 billion fund said it would ask the 9,000 companies in which it invests to ensure their board members had sufficient expertise, time and independence.
The fund, which funnels Norway's revenues from oil and gas production, owns 1.4 percent of all globally listed shares. It has in recent years become a more active shareholder as it has grown in heft.
While some of the demands put forward on Friday are not new for the fund - such as opposing CEOs who sit as chairs of their companies - others are, such as requiring industry expertise from directors.
A majority of independent board members should have "fundamental industry insight" and at least two of the independent members should have worked in the company's industry, said the fund.
"It is really ... industry expertise which is an issue that has been under-communicated from investors," said Slyngstad. "The strong desire to have a profitable company by having a board who knows the business."
He declined to name specific sectors where he thought board industry expertise was lacking, but said: "There has been a focus on the financial sector, also from regulators, which we will reinforce from our point of view.
"But this is a broader issue than just the financial sector," he added. "We have seen quite differing practice in different sectors and different countries.
"This is a signal that ... we will try to look at these issues more quantitatively, to see where we can find the major issues with regards to countries and sectors."
The position papers will form the basis of the fund's position for how it votes on the boards of companies.
"It will be a starting point for how we will vote," Chief Corporate Governance Officer Carine Smith Ihenacho told reporters earlier.
Asked whether the fund would divest from reluctant companies, on these issues, she said: "It will be a basis for voting, dialogue and engagement."
Directors should also ensure they have enough time to fulfil their obligations to the boards on which they serve, said the fund.
In practice, that means board members of listed companies should not serve on more than five boards at one time and the chair of a leading company should generally not chair the board of another company, it said.
In the third quarter, the fund made a return of 2.1 percent, helped by rising North American stocks. It still returned 0.2 percentage points less than the a benchmark index set by the Norwegian Finance Ministry.
"The market development was affected by expectations of differing economic growth and uncertainty about the effects of increased trade barriers," Slyngstad said.


Underwater bombs damage Syria’s offshore oil facilities

Updated 21 min 46 sec ago

Underwater bombs damage Syria’s offshore oil facilities

  • Syria's oil minister said the bombs were planted by divers in the facility used to pump oil to the coast
  • No one claimed responsibility for the attack, the third to target Syria’s oil and gas industry in less than a year

DAMASCUS: Bombs planted underwater off Syria’s coast exploded Monday, damaging oil facilities used to pump oil into one of Syria’s two petroleum refineries, state media and the oil minister said.
No one claimed responsibility for the attack, the third to target Syria’s oil and gas industry in less than a year.
The attack off the coast of Banias was carried out by “terrorists,” state news agency SANA said. Banias is on the Mediterranean shoreline in the Tartous province.
Oil minister Ali Ghanem told state TV that the bombs were planted by divers in the facility used to pump oil to the coast. He said the facility is 3 kilometers (2 miles) off the coast and is 23 meters (yards) underwater.
“The aim of the attack is to cease (oil) imports into Syria,” Ghanem said, adding the ministry’s experts are evaluating and fixing the damage. He said the attack will not stop imports as the ministry had prepared plans in case of such attacks.
Last month, near-simultaneous attacks believed to have been carried out by drones hit three government-run oil and gas installations in central Syria. One of the December attacks targeted the oil refinery in the central city of Homs.
Syria has suffered fuel shortages since last year. Western sanctions have blocked imports, while most Syrian oil fields are controlled by Kurdish-led fighters in the country’s east.
In June, sabotage attacks damaged five underwater pipelines off Banias.
Before the Syrian conflict erupted in 2011, the country exported around half of the 350,000 barrels of oil it produced per day. Now its production is down to around 24,000 barrels a day, covering only a fraction of domestic needs.