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SOFAZ continues policy of placing investment portfolio in short-term instruments

Business Materials 28 January 2011 12:52 (UTC +04:00)

Azerbaijan, Baku, Jan. 28 / Trend E.Ismayilov /

The State Oil Fund of the Azerbaijan Republic (SOFAZ) in 2010 continued the policy of placing its investment portfolio in short-term instruments. The proportion of funds invested for up to five years hit 95.85 percent of its assets.

SOFAZ Executive Director Shahmar Movsumov said 34.56 percent of the fund's investment portfolio was placed in securities for up to one year, 27.4 percent - from one to three years, 33.89 percent - from three to five years and 4.04 percent for over five years.

Movsumov added that, as of Dec. 31, 44.19 percent of the fund's assets were placed in securities with a rating of AAA, 23.21 percent - AA, 25 percent - A, 7.57 percent - BBB, 0.03 percent - other. The fund's assets may not be placed in securities below these investment grades.

SOFAZ assets are placed partly in securities and money market instruments (deposits, bank accounts). Just 0.11 percent of the fund's assets were placed in stocks. Currently, 33.65 percent of the fund's assets are invested in the bonds of agencies and international organizations, sovereign debt securities - 18.36 percent, financial bonds - 22.53 percent, corporate bonds - 13.06 percent, short-term commercial paper - 6.46 percent guaranteed bonds - 4.37 percent, municipal bonds - 0.12 percent and deposits and money market instruments - 1.34 percent.

Movsumov said the geographic distribution of the fund's assets is - 68.89 percent in European countries, 12.75 percent - North America, 7.64 percent - international financial institutions, 6.1 percent - Asia, 3.73 percent - developing countries and 0.89 percent - the Middle East.

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