Norway's $1.3 trillion sovereign wealth fund has removed Russia from its benchmark index and will sell all of its investments in the country over time once it's able to do so, the central bank said.
"Owing to closed markets and extensive sanctions, it is not possible to commence the sale at present," Gov. Ida Wolden Bache and Norges Bank Investment Management CEO Nicolai Tangen said in a letter addressed to the Finance Ministry on Tuesday.
Norway decided on Feb. 27 to drop Russian assets from the fund in response to the country's invasion of Ukraine. The Oslo-based fund is the world's biggest owner of publicly traded companies with a portfolio of more than 9,000 stocks.
Norges Bank will return with a recommendation on lifting a freeze on the fund's investments in Russia once markets are functioning more normally, including more detailed recommendations on carrying out the sale based on applicable sanctions and the fund's interests more generally, it said.
After ordering the fund's investments in Russia be frozen, the ministry asked Norges Bank to prepare a proposal for the implementation of the sale, including dates for adjusting the benchmark index and changes in the investment universe, according to a letter dated Feb. 28.
Russia was removed from all of FTSE Russell's indexes at a price about equal to zero from March 7, when it was also excluded from the fund's benchmark index, since it isn't possible to carry out transactions in the stock market there, the bank said on Tuesday.
The fund's loss on its Russian equity stakes could amount to just under $2.8 billion under estimates presented on March 3, with the stake considered to be worth about 2.5 billion kroner ($280 million), down from 27 billion kroner at the end of last year.
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March 16, 2022 at 03:02AM
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Norway wealth fund's Russia exit to occur over time - Pensions & Investments
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