Sharemax appears to be spiralling to its doom. Multiple stories today report that they are late on dividend payments to investors and may not be able to pay dividends in the forseeable future.
Cash has run out. The overvalued, over-geared properties cannot support the income stream that was demanded from them.
No surprises here then.
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The Norwegian Oil Fund now owns 1.7% of all European shares – this for a country of 4.7 million people. It’s also known as the Petroleum Fund (Oljefondet in Norwegian) or The Government Pension Fund – Global.
The Fund is effectively a country pension fund – save up now during the “earning years” while the oil still flows and use this savings pool to supplement government revenues when the oil dries up.
Norway is transforming its current oil-based wealth into a sovereign fund based on the economic progress of the world.
It’s a more traditional approach to saving than Dubai’s transformational gamble to turn itself into a lasting financial centre. A few years ago it would have looked like the dull, conservative, less effective approach. Now, although stock market declines have hurt the fund, the higher risk nature of Dubai’s approach looks like speculation on a national scale.
This is not to say the citizens of Norway are entirely happy about this plan. Many want increased current spending so that they can have better, cheaper services now. Concerns have also been raised around the suitability of stock markets as an appropriate asset and how the enormous fund manages ethical decisions.
Fin24 has a story outlining how the South African art market has been struggling. Seems that art, like many other alternative investments, has rather more Beta or systematic risk buried inside the arty exterior and isn’t as good a diversifier as claimed.
update 7 April 2009
The FT is also running a story showing art prices plunging in the first quarter.
The Mei Moses index, set for release on Tuesday, shows art prices fell 35 per cent in the first quarter, having held up during earlier months of the financial crisis.
The worst year on record for art investors was 1991, when prices dropped 41 per cent, said Mr Moses, who has collected data going back to the 1800s.
The index providers added that the art market tended to track the state of the economy but with a time lag.
None of this says that art can’t be a good investment, but the systematic risk involved is still high.