NETHERLANDS - Insurance companies and pension funds in the Netherlands have significantly increased their investments in foreign bonds, Statistics Netherlands has said.

The Dutch statistics office said pension funds and insurance companies had extended their foreign bond holdings “particularly strongly” in the third quarter of this year, by Eur13bn to Eur238bn.

The findings confirm recent warnings by leading analysts in the Netherlands that the new supervisory framework for Dutch pension funds and insurers (the FTK) could lead to tens of billions of euros in equities being pulled out of their portfolios.

According to calculations by Jitzes Noorman, fixed income strategist at Rabobank International, pension funds could pull as much as Eur65bln in equities, out of total assets of Eur500bln, to comply with the FTK.

Dutch pension funds are pushing for a delay in the new framework, which is scheduled to be implemented in 2006 as part of the new Pension Act. Under the new act, the liabilities of Dutch funds are to be valued on a marked-to-market basis.

According to Statistics Netherlands, the total balance sheet of insurance companies and pension funds rose by Eur12bn to Eur842bn.

Insurance companies built up their holdings of foreign bonds by almost Eur5bn to Eur70bn, while domestic bond holdings grew by nearly Eur2bn to just over Eur36bn.

The value of foreign bonds held by Dutch pension funds increased by Eur8bn, bringing their total holdings in foreign bonds to Eur168bn. The value of Dutch bonds fell by Eur1bn to just under Eur35bn.

Statistics Netherlands said some two-thirds of the Eur238bn in foreign bonds holdings originated in the eurozone. “The increase of Eur11bn in the eurozone accounted for the largest part of the increase in the value of foreign bonds,” it said.

Contrasting the strong rise in bond holdings, there was “hardly any change” in investments in other securities in the third quarter. Shareholdings by pension funds fell by Eur5bn to Eur243bn. Fixed period deposits rose relatively strongly: by Eur4bn to Eur15bn. Investments in other securities barely changed.