State Oil Fund of Azerbaijan Give Preference to Short-Term Securities

Business Materials 5 November 2007 16:06 (UTC +04:00)

Azerbaijan, Baku /corr. Trend I.Khalilova / In 2007 the State Oil Fund of Azerbaijan (SOFAZ) continued its policy of investing Fund's assets in the securities, in which 87.5% have been placed. Currently the periods of placing assets are one of the important indicators. Currently such a tendency has been appeared in the developed countries ( USA, Japan, Anglia) that the short-term investments bring more profits than long-term investments. Due to it, beginning from 2005, the Fund has been placing its assets in the short-term securities in view of complicated situation in the world markets.

Currently some 28% has been placed in securities with a period of up to one year, 40.7% - from one to three years, 26.5% from three to five years, 3.5% - from five to seven years and 1.3% - more than seven years.

SOFAZ pursues conservative policy in placing its assets in the securities. Mainly they are placed in securities with high ratings provided by international rating agencies such as Moody, Standard & Poors and Fitch. Currently 35.2% of Fund's assets have been place in securities with AAA rating, 37.7% - AA, 18.9% - A and 8.2% - BBB.

The Fund's assets have been partially placed in securities, instruments of the financial markets (deposits, funds and cash accounts). Generally 0.1% of Fund's assets has been placed in stock. At the present time, 87.4% of Fund's assets has been invested in other securities, 4.3% - deposits, 1.1% - financial market and funds, 7.1% - cash accounts.

The geographic placement of Fund's assets seems to be as: 63% in the USA, 31.4% - European countries, 4.8% - Asia, 0.6% - Africa and 0.2% - Australia.