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June 10, 2014 12:25 pm

In 2013, Norway Government Pension Fund Investment in Israeli Stock Market Rose 43% to $1 Billion

avatar by Joshua Levitt

Norwegian Prime Minister Erna Solberg. Photo: WikiCommons.

Norwegian Prime Minister Erna Solberg. Photo: WikiCommons.

The Government Pension Fund of Norway, the largest sovereign wealth fund in the world, has increased its position in shares of Israeli companies, adding five new companies to a portfolio of 62 stocks valued at a billion dollars (NIS 3.5 billion) on the Tel Aviv Stock Exchange, Israel’s Globes business daily reported on Tuesday.

In 2013, the value of its investment in companies traded on the TASE rose by 43 percent in nominal terms, from NIS 2.4 billion to nearly NIS 3.5 billion, Globes said. “Even discounting the boom on the stock exchange, the rise is impressive: the fund’s proportionate holding in shares on the Tel Aviv 100 list grew by 21% last year, exceeding 0.5% of the total of shares listed,” the newspaper said.

Norway also raised it holdings of Israel government bonds to $1.1 billion from $786 million (NIS 3.75 billion from NIS 2.674 billion.) Another $200 million (NIS 693 million) of the fund’s money is invested in bluechip Teva Pharmaceutical Industries Ltd. Norway’s total investment in the Israeli capital market is nearly $2.13 billion (NIS 8 billion.)

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Norwegian financial newspaper Finansavisen tied the investments to a decision by the Norwegian Ministry of Finance in the Summer of 2012 to include Israel in its emerging markets index. “Beyond that, it is no secret that the current government in Norway holds more positive views on Israel than the previous government, and that certainly can’t harm,” Finansavisen said.

In October, a new government in Oslo headed by a center-right party replaced a coalition of left-wing parties that took an openly pro-Palestinian stance. Since then, Norwegian Prime Minister Erna Solberg has declared her opposition to any calls to boycott Israel.

Globes interviewed Aharon (Orni) Izakson, director of the Norwegian-Israeli Chamber of Commerce, who pointed to growing interest on the part of Norwegian companies in Israel’s oil and gas exploration industry and the planning of an Israel-Norway business conference planned for November in Israel. “I hope that it will also be possible to promote the signing of an R&D agreement between the countries,” Izakson also said.

But the Norwegian sovereign wealth fund’s portfolio also reflected its policy to avoid companies that are perceived to be in breach of its guidelines

Izakson said, “Any company that has activity in East Jerusalem or in settlements on the West Bank runs the risk of being put on the blacklist. Like it or not, that is the fund’s declared policy.”

In January, the fund put Lev Leviev’s Africa-Israel Investments Ltd. and its subsidiary Danya Cebus, on its blacklist, though the economic impact of the move was minimal.

The fund’s ethics committee claimed last November that the two companies were guilty of contributing to severe breaches of human rights through construction in East Jerusalem, Globes said. As a result of this decision, the fund sold its Africa-Israel shares worth $2.1 million (NIS 7.3 million) from the $1 billion Israel equities portfolio.

In September 2009, the fund decided to sell its holdings in Israeli defense manufacturer Elbit Systems Ltd. because it provided equipment for Israel’s security fence.

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