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Last Trade - 19/04/21

Consumer Defensives
Large Cap
Market Cap £3.24bn
Enterprise Value £3.49bn
Revenue £540.5m
Position in Universe 170th / 1829

UPDATE 2-Norway shatters wealth fund spending cap amid pandemic

Tue 12th May, 2020 7:11am
* To spend 4.2% of fund in 2020 vs 2.6% originally planned
    * Spending from fund raised to $40.6 bln from $23.6 bln
    * To plug fiscal hole left by coronavirus outbreak
    * To introduce tax on fish farms in 2021

 (Adds currency, detail, GDP data)
    By Terje Solsvik and Gwladys Fouche
    OSLO, May 12 (Reuters) - Norway will sharply raise spending
this year from its one trillion-dollar sovereign wealth fund,
exceeding a self-imposed cap for the first time in over a decade
to aid an economy hobbled by the coronavirus pandemic.
    The withdrawal from the fund is projected to hit a record
419.6 billion crowns ($40.6 billion), a revised budget from the
finance ministry showed on Tuesday, up from 243.6 billion crowns
forecast last October.
    The wealth fund - which invests proceeds from the country's
oil industry in foreign stocks, bonds and property, - is worth
about $190,000 for every Norwegian man, woman and child.
    Annual withdrawals from it, known as the structural non-oil
deficit, are capped at 3% of its value, though that can be
exceeded in times of economic hardship. 
    Statistics Norway said on Tuesday the mainland economy
contracted by 2.1% in March from February, and by 6.9% in the
first quarter, bigger falls than preliminary readings reported
on April 24.  urn:newsml:reuters.com:*:nO9N28E026
    Norway last exceeded the fund ceiling during the 2008-2009
financial crisis, withdrawing 4.1% at a time when the cap was
set at 4.0%. It was lowered in 2017 to the current 3.0% to
reflect lower expected future returns.    
    This year's withdrawal will now reach 4.2% of the fund's
Jan. 1 value rather than the originally planned 2.6%, the
government said.
    The extra spending will help to offset a tax shortfall and
cover initiatives announced since a partial lockdown began on
March 12, including extra unemployment benefits, cash support
for companies and oil industry investment incentives, the
finance ministry said.
    As its rate of COVID-19 infection declines, Norway is
gradually easing the curbs and will soon publish a long-term
recovery plan.  urn:newsml:reuters.com:*:nL5N2CG6U3 urn:newsml:reuters.com:*:nL8N2CP9SH    
    The ministry has predicted the economy will contract this
year by 4.0%, and last week the central bank cut its key policy
rate to zero percent for the first time.  urn:newsml:reuters.com:*:nL8N2CP3Q8
    The ministry also said it planned to introduce a new tax on
its fish farming sector, the country's second-largest industry
after oil production.
    The tax, of 0.40 crowns per kilo of fish and payable from
2022, should raise some 500 million crowns for local and
regional governments from 2022, the ministry predicted.  
    Listed fish farmers include the world's largest, Mowi
 MOWI.OL , Salmar  SALM.OL  and Leroey Seafood  LSG.OL . 
    The crown currency initially weakened slightly following the
budget and the GDP data, but traded slightly stronger at 11.13
per euro at 0732 GMT.

 (editing by John Stonestreet)
 ((terje.solsvik@thomsonreuters.com; +47 918 666 70))
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