Norway oil fund chief warns ‘very, very low’ stock returns at Davos

Nicolai Tangen, CEO of Norges Bank Investment Management, which manages Norway’s Sovereign Wealth Fund, spoke at Davos, indicating ‘very, very, low’ stock returns owning to inflation and continuing pressure on markets from declining markets in 2022. He expects the low returns to carry on for some time.

Nicolai Tangen, CEO of Norges Bank Investment Management, which manages Norway’s Sovereign Wealth Fund, spoke at Davos, indicating ‘very, very, low’ stock returns owning to inflation and continuing pressure on markets from declining markets in 2022. He expects the low returns to carry on for some time.

On the subject of inflation, Tangen cited a possible acceleration of rates before the summer due, in part, to China’s re-opening. Tangen also said the US is likely to undergo a new cycle of interest rate hikes.

The market declines of 2022 will put further pressure on markets. “We have not seen the secondary effects of the $30tn in wealth destruction we saw last year,” Tangen said. “We haven’t seen it popping up anywhere. We haven’t seen any Japanese insurance companies going bust.”

This lull in markets, according to Tangen, will persist. “I think we will see a long period of time with very, very low returns,” he said, “I think it takes a long time to sweat it out.”

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