Companies should end quarterly earnings reports, Norway sovereign wealth fund says

OSLO (Reuters) - Norway's sovereign wealth fund, a major global investor, said on Tuesday it is proposing that publicly listed companies should stop reporting quarterly earnings and instead opt for half-year results in order to encourage better long-term decision-making.

The $1.8 trillion fund holds stakes in close to 9,000 companies in more than 70 countries, representing 1.5% of the world's listed equities and giving it an influential voice in global finance.

"Regular semi-annual reporting, supplemented with continuous updates of material information, should adequately meet disclosure requirements," fund manager Norges Bank Investment Management (NBIM) said in a report outlining its view.

The number of corporations listed on public stock exchanges has declined in recent decades, and more companies are now owned by private equity funds, in which NBIM is prevented by the Norwegian government from investing.

The fund argued that quarterly reporting cycles lead to a risk of companies prioritising short-term profits and the meeting of analyst forecasts over long-term investment, value creation and sustainable development.

"Short termism can undermine the benefits of being publicly listed, and discourage companies with longer-term strategies from going or remaining public," the Norwegian fund said, adding that this trend limits investors' ability to diversify risks.

JPMorgan Chase CEO Jamie Dimon in a letter to shareholders last year said intensifying reporting requirements and the "relentless pressure of quarterly earnings" was likely among the factors pushing companies to refrain from public listings.

Saving petroleum revenue for future generations, the Norwegian fund has grown from nothing in 1996 to a value of more than three times that of Norway's annual gross domestic product, or $310,000 for each Norwegian.

The fund held 72% of its assets in equities on June 30, 2024, its latest reporting date, 26% in fixed income markets, 1.7% in unlisted real estate and 0.1% in unlisted renewable energy infrastructure such as wind farms.

(Reporting by Terje Solsvik; Editing by Kirsten Donovan)