Norges Bank’s Lankan equity portfolio halves in 2022 amid sharp rupee depreciation

• The Fund’s equity portfolio declines to US$ 35.5mn from US$ 79.9mn at 2021-end
• Divests complete holding in ComBank; expands investment portfolio in SL to 22 stocks

Norges Bank Investment Management, which manages Norway’s US$ 1.3 trillion Government Pension Fund Global, saw its equity investments in Sri Lanka more than halving in 2022, largely driven by the sharp depreciation of the Sri Lankan rupee during the year. 

According to the official website of Norges Bank Investment Management, the Fund’s equity portfolio in Sri Lanka declined to US$ 35.49 million at the end of 2022 from US$ 79.95 million at the end of 2021, falling to a six-year low since the Fund entered Sri Lanka with an investment of US$ 30.99 million in 2015.

Most notably, the fund had divested its entire 3.42 percent ownership stake in Commercial Bank of Ceylon PLC last year. Prior to the exit, the equity stake in Commercial Bank made up the Fund’s second largest equity holding in Sri Lanka just behind JKH. In addition, it had also divested the entire holding in CT Holdings PLC.

However, the fund added Hayleys Fabric PLC, Hela Apparel Holdings PLC, Nestle Lanka PLC and Renuka Agri Foods PLC to its investment portfolio by purchasing 0.07 percent, 1.7 percent, 0.18 percent and 0.56 percent ownership stakes in them, respectively. Thereby, the fund expanded its investment portfolio in Sri Lanka to 22 equities in the period.

At the end of 2022, Aitken Spence PLC became the Fund’s second largest investment in Sri Lanka by replacing Commercial Bank. During the year, it increased its ownership stake in the company to 2.66 percent from 0.24 percent stake held at end of 2021.

Similarly, the fund also increased holdings in CIC Holdings PLC, Hemas Holdings PLC and hSenid Business Solutions Ltd.

Meanwhile, the fund marginally reduced its holding in John Keells Holdings PLC to 2.3 percent at end of 2022 from 2.41 percent held at the end of 2021. Driven by the rupee depreciation, the value of its holdings in JKH declined to US$ 11.74 million at end of 2022 from US$ 23.51 million a year ago.

After peaking to US$ 114.35 million in 2019, the Fund’s equity portfolio in Sri Lanka has been on the decline. 

The Fund reported a record loss of 1.64 trillion Norwegian kroner (US$ 164 billion) for 2022 due to “very unusual” market conditions.