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1Q 2003 Quarterly report

The return on the Government Petroleum Fund in the first quarter of 2003 was -1.71 per cent measured in terms of the currency basket that corresponds to the composition of the Fund’s benchmark portfolio.

31 March 2003

The first quarter return on the ordinary equity portfolio (excluding the Environmental Fund) was -7.76 per cent measured by the benchmark portfolio’s currency basket. Share prices in the main markets rose in the first couple of weeks in 2003, but showed a tendency to fall, particularly in Europe, from the second half of January and for the remainder of the quarter. The fixed income portfolio had a positive return for the quarter of 2.17 per cent, measured by the currency basket.

The return on the Petroleum Fund’s ordinary portfolio in the first quarter of 2003 was 0.21 percentage point higher than the return on the benchmark portfolio defined by the Ministry of Finance. An excess return was achieved through both equity and fixed income management.

The first quarter return on the Environmental Fund was negative at -8.20 per cent, measured in terms of the benchmark’s currency basket.

During the quarter, capital equivalent to NOK 43.3 billion was transferred to the Petroleum Fund’s international equity and fixed income portfolios. The market value of the Fund’s total securities portfolio was NOK 682.0 billion at the end of the first quarter, which is an increase of NOK 73.0 billion since year-end. The increase is due partly to the addition of new capital and partly to the depreciation of the krone. Movements in the krone exchange rate have no effect on the Fund's international purchasing power, however.

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