“We now have more than NOK600bn in bonds with negative yields. That is equivalent to a quarter of our fixed-income portfolio, and in line with the markets.”Grande added: “Uncertainty about global trade and economic growth dampened returns early on, but markets rallied towards the end of the period, driven partly by the prospect of more expansionary monetary policy in developed markets.”The Norwegian krone continued to rally on foreign exchanges in the reporting period, extending its gains in the first three months of the year. This hit the value of the GPFG by NOK38bn, according to NBIM data. Inflows into the fund amounted to NOK6bn in the second quarter.The fund’s equities allocation continued to increase, rising to 69.3% of investments from 69.2% on 31 March, and up from 66.3% at the end of 2018.Meanwhile, the fixed-income allocation was unchanged from March at 28% and unlisted real estate contracted to 2.7% of the fund, from 2.8% three months earlier and from 3% at the end of 2018.The GPFG held NOK9.4trn in assets as of 21 August, according to its website.‘It’s becoming harder to mitigate against negative yields’ Norway’s giant sovereign wealth fund benefited from falling bond yields in the second quarter of 2019, but now holds more than NOK600bn (€60bn) in fixed income assets with a negative real yield.In its second quarter report, Norges Bank Investment Management (NBIM), which manages the Government Pension Fund Global (GPFG), revealed it made more on bonds than equities between April and June, with fixed-income investments returning 3.1%, while equities generated a return of 3%.The oil fund’s manager reported a positive overall return on investments of 3% in the second quarter, or NOK256bn – 0.2 percentage points below the benchmark – and said that equities had delivered a positive return despite volatile market conditions.Trond Grande, deputy chief executive of NBIM, said: “We had a positive return on our fixed-income investments thanks to falling yields. Chris Iggo, CIO for fixed income, AXA IMIn a client commentary published last week, Chris Iggo, CIO for fixed income at AXA Investment Managers, warned that the strong returns from fixed income so far this year would be “much harder to sustain” in the coming months.Investors faced “unprecedented conditions” in the asset class, Iggo said, with “more than 40%” of European investment grade corporate bonds, and 60% of European sovereign bonds, trading with a negative yield, including the entirety of the German Bund yield curve.“For bond investors it is becoming harder to mitigate against the impact of lower yields on portfolio decisions,” he added. “It might not be the time to take more credit risk, yet there is incrementally less reward for extending out along the yield curve.”He added: “We should be worried about lower and lower bond yields because they are sending very negative signals about the economic outlook, but they may cause some (as yet not fully understood) tensions in the financial system with structural implications.”
…no info on whether Govt official instructed PoliceThe Guyana Police Force (GPF) on Thursday afternoon denied that one of its ranks had been verbally assaulted by an A Partnership for National Unity/Alliance For Change Government Minister after an online article went viral on social media about another confrontation involving yet another official serving within the David Granger Administration.The online article had alleged that Minister within the Public Infrastructure Ministry, Annette Ferguson had been involved in a confrontation with ranks of the East Ruimveldt Police Outpost after they refused to adhere to instructions from her toMinister within the Public Infrastructure Ministry, Annette Fergusonrelease someone they had arrested for committing an offence.The offence was said to have occurred on Sunday night when the individual in question was alleged to have been speeding on a motorcycle without a number plate which resulted in him being stopped and detained.The article further alleged that the rider assaulted a Police Constable identified only as “Jacobs” before he was taken to the East La Penitence Police Outpost.It stated that the ranks complained that the Minister in question had verbally assaulted them after they raised objections that she could not instruct them or even threaten them with dismissal. The man was released and the Minister subsequently left.The Police Force in responding directly to the article said that the Police Constable has denied being abused. It did not name him.“Please be advised that the Constable in question has indicated in a signed statement that he was neither abused nor assaulted by the Honourable Minister Annette Ferguson, during the night in question,” Police said.The statement from the Police also said that “it, therefore, makes the publication by the online media entity a total fabrication, which may have legal consequences”.Surprisingly, the Police statement did not provide any other details or confirm whether the Minister had indeed given instructions to the Policemen. Further, it did not state the circumstances that led to the arrest and detention of the man or on what grounds he was released.No official statement was forthcoming on the Minister’s very active social media page about the incident, and efforts to contact her for a comment on Thursday proved futile.