World Financial Crisis not Lead to Fall in SOFAZ Income (video)

Business Materials 19 September 2008 10:59 (UTC +04:00)

Azerbaijan, Baku, 19 September/ Trend , corr E. Ismayilov/ "The crisis in world financial markets will not affect income of the State Oil Fund of Azerbaijan (SOFAZ), on the contrary, SOFAZ income is expected to surpass forecast figures," Shahmar Movsumov, executive director of the Fund said.

"The crisis in financial markets has affected large financial organizations which have been operating for 100 to 150 years. Some of them are on the brink of bankruptcy. But SOFAZ is always conservative about management of its assets and we place our finds in the high-rating securities. In a period of crisis, such securities are in high demand and their price goes up. SOFAZ only benefits from it," Movsumov said.

The fall in oil prices showed appropriateness of a conservative approach in working up of the budget. The price of oil is fixed at $70 per barrel in budget estimations while it was $50 last year, he said.

"Te fall in oil prices up to $100 a barrel showed accuracy of this approach. At present, SOFAZ income exceeds AZN 10bln. It is expected to reach AZN 13bln by the end of the year," he said.

However, drop in prices of securities in world markets will affect SOFAZ income.

"According to our estimations and information provided by the Norway Oil Fund, the losses total to 3% to 4% since the beginning of the year," Movsumov said.

The stock market of US has fell by 16% to 17% and that of Europe - 20%. The fall in the securities market of Russia made up 54% since the beginning of the year. It points to serious crisis and many funds and organizations try to handle the crisis, he said.

""Oil fund of Azerbaijan will complete 2008 with success even if the income will be less than that of last year," he said.

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