Norges Bank Investment Management's investments on the Warsaw Stock Exchange since 2015
Norges Bank Investment Management (NBIM) is a division of Norway's central bank, Norges Bank, responsible for managing the Government Pension Fund Global, also known as the Oil Fund. The fund, one of the world's largest sovereign wealth funds, manages Norway's revenues from the oil and gas industry with the goal of securing long-term financial returns for future generations. NBIM invests globally in equities, fixed income, and real estate. The fund manages $1.4 trillion USD.
When we started investing on the Warsaw Stock Exchange in 2016, we were surprised to find that NBIM held small positions in what felt like nearly every stock we looked at. Since then, it has been a “truth” we lived with that “Norway owns a small part of almost every small Polish listed company.”
Today, I was reminded of this again but noticed that I haven't “seen NBIM everywhere” in a long time. It then became clear that even though the share of the portfolio invested in Poland is at about the same level as in 2015/2016, the fund has largely withdrawn from smaller positions.
As NBIM tends to own 1-8% of the free float in companies (from the small sample we have looked at), this “across the board” reduction has likely had a somewhat depressing effect on Polish “deep value” stocks in recent years. On the positive side, the future potential downside impact is now more limited—they simply don't have much left to sell. On the upside, there could be opportunities if they once again decide to increase interest in small Polish micro caps—though this may not be too likely.
On that note, it will be interesting to see if NBIM chose to tender their shares in Stalprodukt's recently completed tender offer. Pre-tender NBIM owned 1.43% of the outstanding shares and had recently been a net seller.
According to ChatGPT, the total market capitalization of the Polish stock exchange today is about $380 billion. With a Polish equity portfolio of $1.6 billion (as of the end of 2023), NBIM controlled 0.42% of the Polish stock market. It will be interesting to follow up on this in about 7-8 months when NBIM releases figures for 2024.