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Norway Loses Faith In PIIGS

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Norway wisely invests in income from North Sea Oil in its massive sovereign wealth fund which is the biggest in europe, but now it appears, it has lost faith in investing in bonds from the PIIGS.

Norway’s Sovereign Wealth fund sold its entire holding of Irish government bonds in the final weeks of 2011.

The holding, worth NOK3.8 billion or €501m, was sold as part of a move away from euro zone peripheral bonds by the Norwegian fund. The fund is the biggest sovereign fund in Europe. The Norwegian fund also liquidated its holdings of Portuguese bonds, and reduced its holdings of Spanish and Italian bonds.

The fund said it will over time reduce its share of euro zone bonds from 60% to 40% of its bond holdings, moving the balance into emerging market bonds.Norway strongly objected to the debt reduction deal for Greece, fearing it sets a precedent for other sovereign debt reductions in the euro zone, which would be to its disadvantage.

Source: RTE News

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PIIGS Debt/GDP chart of 2010

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Below is chart of PIIGS debt/GDP figures from the Telegraph.

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