Top sovereign fund cuts stake in Indian bluechips

Tags: News

Fund completely exits Coal India, DLF, Adani, BoB and Essar Oil

The world’s second largest sovereign fund Norway’s Government Pension Fund Global has reduced equity exposure to Indian companies in 2011. According to data published on its website, the fund had equity stake in 120 Indian companies as of December 31, 2011, compared with 246 companies as of December 31, 2010.

Its investments in Indian equities were worth $1.82 billion as of December 31, a steep fall from $3.47 billion worth of investments it had held in India a year ago.

According to the fund’s country-wise equity holding list for 2011 released on its website along with its annual report on March 16, besides reducing equity exposure to some companies, the fund completely exited its investment in close to 120 Indian companies. Among them are Coal India, DLF, Adani Enterprises, Aurobindo Pharma, Bank of Baroda and Essar Oil.

Stocks where the sovereign fund reduced stakes included Infosys, Reliance Industries, ICICI Bank and Suzlon Energy. The fund has completely exited some of the small- and mid-size banks such as Allahabad Bank, Andhra Bank, Bank of Maharashtra, Federal Bank, Oriental Bank of Commerce and Syndicate Bank. The companies in which the fund raised stake included SBI, ONGC, Larsen & Toubro, Reliance Infrastructure, Indian Hotel, SKS Microfinance, GMR Infrastructure, GVK Power, Lanco Infratech and NHPC.

According to the fund, it also took exposure to India’s sovereign debt papers worth Rs 518 crore (570 million kroner), in 2011. The Government Pension Fund Global is managed by Norwegian central bank Norges Bank’s investment arm Norges Bank Investment Management (NBIM) and has $583.04 billion worth of assets under management. NBIM manages most of Norges Bank’s foreign exchange reserves.

The fund suffered a loss of 2.5 per cent at $15.13 billion in 2011 as global stock markets slumped, said NBIM’s annual report for 2011.

Globally, the fund’s worst performing stock investment was in French bank Societe Generale, followed by carmaker Daimler and UK bank HSBC Holdings, the annual report said. The fund’s best performing stocks were Apple, maker of the iPad and iPhone, followed by UK drugmaker GlaxoSmithKline and US oil company Exxon Mobil.

The market value of the fund rose by $41.20 billion to $583.04 billion in 2011. Equity investments sufferred a loss of 8.8 per cent in 2011 as stocks fell in Europe, where the fund had half its shareholding at the end of the year, NBIM said.

“The results showed a substantial decline in share prices in 2011 and increased uncertainty about government debt in the euro zone area,” said Yngve Slyngstad, chief executive officer of Norges Bank Investment Management, which manages the fund.


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