Government Pension Fund Norway (discontinued), 2nd half-year 2005

Measured according to the OSEBX index, share prices on Oslo Stock Exchange rose 40.5 per cent in the same period. The lower result of the National Insurance Scheme Fund is mainly due to the Fund's large holdings of interest bearing securities. According to regulations from the Ministry of Finance, a minimum of 65 per cent of the Fund's recorded capital should be invested in state securities. Moreover, the Fund may own shares and other equity instruments listed in Norwegian, Danish, Finish or Swedish stock exchanges for up to 20 per cent of the Fund's total recorded capital. The total value of investments in shares listed in foreign stock exchanges must not exceed 20 per cent of the Fund's limit for equity instruments.

The increase in the Fund's capital is mainly due to increases in the holdings of bonds and stocks and other equities . Figures show a value of NOK 34.3 billion for bonds held by the Fund at the end of second half of 2005. Compared with the value at the end of 2004 this was an increase of NOK 7.7 billion. Holdings of shares and other equities showed a value of NOK 50.6 billion at the end of 2005. This was an increase of NOK 9.7 billion compared with the value at the end of 2004.

At the end of 2005, loans were the largest financial object in the Fund's portfolio with a value of NOK 96.6 billion. This represented 50.5 per cent of the Fund's total capital. Next, the financial objects stocks and other equities and bonds counted for 26.4 and 17.9 per cent of total capital, respectively.

From 31 December 2004 and on, the National Insurance Scheme Fund's commercial papers, bonds and shares and other equities are reported at market values. Previously, these financial assets were reported at their original cost, while unrealised gains/losses were recorded as other financial assets.

The Government Pension Fund was established January 1 2006. The Fund is comprised of the Government Petroleum Fund and the National Insurance Scheme Fund. The activities in these two funds will continue. The National Insurance Scheme Fund will administer the domestic part of the Fund, The Government Pension Fund - Norway .

Tables:

• Table 1 National Insurance Scheme Fund. Balance sheet. 31 December 2000-31 December 2005. NOK million
• Table 2 National Insurance Scheme Fund. Bonds and shares and other equity by debtor sector. NOK million