Norway Fund Lifts Aussie Debt Holdings, Raises BHP Stake

Norway’s sovereign wealth fund, the world’s largest, almost doubled its investments in Australian bonds and equities last year, boosting sovereign debt fourfold and adding provincial debt securities.

The 4.08 trillion kroner ($715 billion) Government Pension Fund Global held 18.1 billion kroner of Australian federal government securities as of Dec. 31, according to a report released on March 8, up from 4.11 billion kroner a year earlier. The fund also owned notes worth 3.09 billion kroner from Queensland, 1.43 billion kroner from New South Wales and 380.8 million kroner from Victoria. It hadn’t held any bonds from Australian states at the end of 2011.

Australia is one of just 10 sovereigns with AAA credit scores from all three major rating companies and has the highest benchmark borrowing costs among major developed economies, both factors that attract investors. New South Wales and Victoria also carry top grades from Moody’s Investors Service and Standard & Poor’s. Queensland, Australia’s biggest provincial issuer, is one step lower.

The report also showed the Norwegian fund cut holdings last year of debt issued by the U.K. and France and boosted investments in emerging markets including Turkey, Russia and Taiwan.

Buying BHP

Government Pension Fund Global’s holdings of fixed-income securities from all Australian issuers, including corporate borrowers, climbed to 29.8 billion kroner from 11.3 billion kroner, according to the report. Its holdings of Australian equities swelled to 53.3 billion kroner from 31.8 billion kroner.

The fund’s stake in Australian listed shares of BHP Billiton Ltd., the world’s largest mining company, more than doubled to 5.05 billion kroner. It also holds a 11.6 billion kroner stake in U.K.-listed shares of the firm. The value of its shares in ASX Ltd., the operator of Australia’s main stock exchange, gained 34 percent to 282.8 million kroner.

The fund’s largest stock holding at the end of the year was Nestle SA at a value of 30.1 billion kroner, followed by Royal Dutch Shell Plc and HSBC Holdings Plc.

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