Norway's state pension fund, the biggest investor on European stock markets, said Friday it was monitoring vulnerable euro zone economies in which it holds billions of euros worth of bonds. At the end of 2009, the fund said it held 55 billion kroner (6.9 billion euros, $8.8 billion) worth of bonds from Portugal, Italy, Greece and Spain, all of which have been hit on financial markets in recent days. It also held 12.6 percent of its European stock investments in these countries at the start of the quarter, it said Friday. The figure amounts to 104 billion kroner worth of shares, notably in banks such as Spain's Santander. “The situation in which we currently find ourselves is a situation that markets deem serious,” Yngve Slyngstad, the head of investment at Norway's central bank, told a press conference. “Obviously, we are paying attention to these circumstances,” he added. The sovereign wealth fund - which contains nearly all of the state revenues from Norway's giant oil industry - was worth 2,763 billion kroner at the end of March, compared to 2,640 billion kroner at the end of 2009. It held 1.8 percent of Europe's total stock market capitalisation at the end of 2009. In the first quarter, the fund's equity investments returned 4.9 percent, while fixed-income investments returned 2.1 percent, for a total return of 3.9 percent. “States hold high levels of debt but most of them have deficits, which means that their debt goes up and that they are dependent on bond investors,” Slyngstad said. But “bond investors' appetite for state debt, especially of southern European countries, has been somewhat limited over the past weeks,” he added. In the first three months of the year, the Norwegian state injected 19 billion kroner of its oil revenue into the fund. Norway's sovereign wealth fund posted a 3.9 percent return on investment in the first quarter as it tracked global markets higher, Europe's biggest equity investor said on Friday. Inflows of government money from the oil sector were the lowest since 2003, according to the fund, which is the world's second-biggest sovereign wealth fund after that of the United Arab Emirates. The fund said it was underweight on assets of debt-ridden euro zone peripheral states and has gained approval to invest in real estate, which could account for up to 5 percent of its investments in future. The value of the central bank-run fund stood at 2.763 trillion Norwegian crowns ($468.5 billion) on March 31, up from 2.64 trillion at the end of 2009.