SEC filing reveals Norwegian fund's huge Israeli holdings

Nicolai Tangen credit: Tali Bogdansky
Nicolai Tangen credit: Tali Bogdansky

As the Norwegian sovereign wealth fund mulls disinvesting from Israeli financial bodies, "Globes" finds it has investments in 70 Israeli companies worth billions of dollars.

The Norwegian sovereign wealth fund this week published its share holdings and other investments as of the end of 2022 in a filing to the US Securities and Exchange Commission (SEC). The filing shows that the fund held shares in 70 Israeli companies worth billions of dollars from a range of sectors including those traded on Wall Street and companies only traded on the Tel Aviv Stock Exchange (TASE). The SEC filing shows that the fund's 10 biggest investments in Israeli companies are worth $1.8 billion.

Because the Norwegian sovereign wealth fund is one of the world's biggest investors, it receives major attention from investors and governments. It holds shares in 9,228 companies and its portfolio holds 1.3% of all the shares traded on global stock markets. These shares represent 70% of its capital with the balance in bonds, real estate and infrastructure and renewable energy projects.

The Norwegian sovereign wealth fund made headlines in Israel in December when it reported that it is considering disinvesting from some of the financial bodies in Israel due to their activities in the "occupied territories."

The fund has in the past disinvested from real estate, construction and infrastructure companies like Shapir Engineering and Industries (TASE: SPEN), Ashtrom Group (TASE: ASHG), Electra (TASE: ELTR), Mivne Real Estate (TASE: MVNE) and Danya Cebus (TASE: DNYA) because they operate over the "green line." At the end of 2022, the Norwegian Sovereign Wealth Fund announced that it was disinvesting from Cognyte Software (Nasdaq: CGNT) for the same reason. Following each of these disinvestments the fund cited "unacceptable risks" because of human rights violations.

All the big banks

From the Norwegian sovereign wealth fund's list of Israeli investments it is clear that the biggest holdings are in the country's financial institutions. The fund's biggest holding is a 2% stake in Bank Hapoalim (TASE: POLI) worth $246 million. In fact the fund holds stakes in all of Israel's five big banks - a 2.1% stake in First International Bank of Israel (TASE:FTIN1; FTIN5) worth $83.6 million, and less than 1% in the other three banks - a stake worth $73.9 million in Bank Leumi (TASE:LUMI), a stake worth $52.1 million in Mizrahi Tefahot Bank, and a stake worth $52.1 million in Israel Discount Bank (TASE: DSCT).

The Norwegian sovereign wealth fund also holds small positions in Israel's major insurance and investment funds companies including Israel Phoenix Assurance Ltd. (TASE:PHOE1; PHOE5), Harel Insurance Investments and Financial Services Ltd. (TASE: HARL), Menora Mivtachim (TASE: MMHD), and Clal Insurance Enterprise Holdings (TASE: CLIS).

Other major holdings include a stake in ICL (TASE: ICL: NYSE: ICL) (formerly Israel Chemicals) worth $124 million, a 2.4% stake in Bezeq Israel Telecommunications Company Ltd. (TASE:BZEQ) worth $112 million and a 1% stake in Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) worth $104 million.

The list continues with significant holdings in energy companies - a 3% stake in Delek Group Ltd. (TASE:DLEKG) worth $61 million and stakes in Paz Oil Company Ltd. (TASE:PZOL), Enlight Renewable Energy (TASE: ENLT; Nasdaq: ENLT) and Energix Renewable Energies (TASE: ENRG).

In IT, the Norwegian sovereign wealth fund has a 1% stake in NICE Systems Ltd. (Nasdaq: NICE; TASE:NICE) worth $126 million at the end of 2022 and stakes in Hilan (TASE: HLAN), Matrix (TASE: MTRX), One Software (TASE: ONE) and Perion Network (Nasdaq: PERI; TASE: PERI). The fund also has a 1.6% stake in Radware (Nasdaq: RDWR) worth $18.3 million, a 1.9% stake in Nova Measuring Instruments Ltd. (Nasdaq:NVMI; TASE:NVMI) worth $17.4 million and a stake in Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE:TSEM.

In real estate, the fund has holdings in Melisron (TASE: MLSR), Azrieli Group (TASE: AZRG), Big Shopping Centers (TASE: BIG), Alony Hetz (TASE: ALHE), Airport City (TASE: ARPT), Sella Real Estate (TASE: SLARL) and REIT 1 (TASE: RIT 1).

Biggest ever losses

During 2022, the SEC filing shows that the Norwegian sovereign wealth fund added to its Israeli portfolio by buying shares in OPC Energy (TASE: OPCE), Camtek (TASE: CAMT), and FOX (TASE: FOX), while selling its stakes in Taboola (Nasdaq: TBLA), Spacecom (TASE: SCC), AFI Properties (TASE: AFI), Norstar Holdings (TASE: NSTR), Victory Supermarket Chain (TASE: VCTR) and ZIM Integrated Shipping Services (NYSE: ZIM).

In 2022, the Norwegian sovereign wealth fund sustained its biggest ever one year loss of $163 billion, representing a negative return of 14.1%. This was the fund's second biggest ever negative return after it loss 20% in 2008 during the financial crisis.

Despite this, the fund itself enjoys surplus profits that flow into it from Norwegian oil and gas export revenues, whose prices in 2022 were significantly higher than in previous years.

The current economic situation, said Norwegian sovereign wealth fund CEO Nicolai Tangen, "is the most challenging in the 30 years of the fund's existence," and he warned that with the stock and bond markets in decline, "There is nowhere to profit." Nevertheless, the trend on global stock markets has been positive since the start of 2023.

Published by Globes, Israel business news - - on February 16, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Nicolai Tangen credit: Tali Bogdansky
Nicolai Tangen credit: Tali Bogdansky
Danny Zaken and Assaf Gilead
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