Norwegian sovereign wealth fund invests $1B in Turkey in 2016

Norway's state sovereign wealth fund, which is the world's largest asset fund at approximately $900 billion, invested around $1 billion in Turkey by the end of 2016.

The total value of the fund's investment in Turkey reached $936 million at the end of December 2016, according to the information that Anadolu Agency compiled from Norges Bank data, which manages the Norwegian sovereign wealth fund.

The investment portfolio of the fund includes shares from five Turkish energy companies, namely Tüpraş Turkey Petroleum Refineries Inc., Enka Construction and Industry Inc., Petkim Petrochemical Holding Inc., Ereğli Iron and Steel Factories and Aksa Energy Production Inc. The fund's share in the said five companies was recorded as $112.112 million.

At the end of last year, the fund made the biggest energy investment in Ereğli Iron and Steel Factories with $48.207 million, followed by Tüpraş Turkey Petroleum Refineries Inc. with an investment of $46.136 million.

Garanti Bank received the largest share of the investments

Turkey's Garanti Bank received the largest share of the Norwegian sovereign wealth fund's investments in Turkey, worth a total of $1 billion. The fund, which has a 1.23 percent stake in Garanti Bank, had a total investment of $112.63 million in the bank.

The share of Pınar Süt Mamülleri Sanayii A.Ş., which is a Turkish dairy company wherein the fund has the largest share in its Turkish portfolio with 4.99 percent, was traded at the Borsa Istanbul (BIST).

In other words, the total amount of investment in the company's stocks has exceeded $10 million. Moreover, the fund's partnership in Pınar Süt Mamülleri Sanayii A.Ş. also attracted attention as the 20th largest investment of the fund's global investments. The fund has been making small investments in Turkey since 2001, but as of 2008 has been substantially expanding its investments.

Norwegian sovereign fund to increase its stock investments

Since 1990, Norway's state asset fund has been investing in stocks, bonds and real estate markets in foreign countries with the profit obtained from the oil and natural gas production of the country. According to the fund's strategy, 60 percent of investments are allocated to stocks, 35 percent to fixed-income securities and 5 percent to real estate. The Norwegian government aims to increase its share of equity investments to 70 percent this year.

Furthermore, the Norwegian government can use 4 percent of fund revenues while the remaining 96 percent is accumulated. Norway's investments comprise around 9,000 companies in 77 countries with the 96 percent accumulated money, and the revenue obtained is spent while the money of the country remains constant. Moreover, the Norwegian wealth fund is also interested in the shares of large companies operating in the pharmaceuticals, banking, food, communication services, transportation and white goods sectors in Turkey.