SOFAZ Places 96% of Its Portfolio in Short-Term Investments

Business Materials 28 January 2008 16:30 (UTC +04:00)

Azerbaijan, Baku, 28 January /corr. Trend I.Khalilova / Within the State Oil Fund of Azerbaijan (SOFAZ) continued the policy of placing its investment portfolio in the short-term instruments and the share of funds allocated placed for five years made up 96%, said the Executive Director of SOFAZ, Shahmar Movsumov.

The period of placing the assets is one of the urgent indicators. Such a trend has formed in the developed countries ( USA, Japan, Anglia) that short-term investments bring more profit than long-term investments. Because of this, from the beginning of 2005 SOFAZ has been placing its funds in short-term securities.

Currently 24.82% of the portfolio has been placed in securities for a period of up to one year, 43.34% for one to three years, 27.83% for three to five years, 2.95% for five to seven years and 1.06% for more than seven years.

The SOFAZ is pursuing a conservative policy with regards to the placement of the assets in securities. Mainly, they are placed in the Issues with high ratings established by the rating agencies such as Moody and Standard & Poor. Currently 48.13% of the Fund's assets has been placed in securities with a rating ААА in the version of S/P and Ааа - Moody's, 30.82% - АА, АА+, АА- and Аа1, Аа2, Аа3, 15.72% - А, А+, А- and А1, А2, А3, 3.26% - ВВВ, ВВВ+, ВВВ- and Ваа1, Ваа2, Ваа3, 2.07% - ВВ, ВВ+, ВВ- and Ва1, Ва2, Ва3. The Fund's assets cannot be placed in securities lower than the investment rating.

The geographic placement of the Fund's assets seems to be 50.73% being placed in the USA, 41.06% in European Countries, 4.85% in Asia and 3.36% in other countries.