Azerbaijani State Oil Fund prepares for importing first gold batch
Azerbaijan, Baku, Nov. 15 / Trend E. Ismayilov, A. Akhundov /
The Azerbaijani State Oil Fund (SOFAZ) will deliver the first batch of the previously purchased physical gold to Azerbaijan by late 2012, SOFAZ head Shahmar Movsumov told media today.
According to the recent decision of the Cabinet of Ministers, gold imports into the country for SOFAZ's needs are exempt from customs duties and VAT.
According to SOFAZ's new investment policy, as well as to diversify the investment portfolio and increase the profitability of its placing, it is envisaged to include new financial instruments, including stocks, gold and real estate in the portfolio.
Movsumov said that the total weight of the first batch of gold, which is planned to bring into the country, will hit about one ton. Bringing a batch weighting more than a ton is a complex process, as airlines do not transport large amounts of the precious metal.
"Therefore, the purchased gold volumes will be imported into the country in phases," he said.
"The main goal is to bring the entire volume, but taking into account the security."
Movsumov added that SOFAZ has already completed the negotiations on the gold storage with the Azerbaijani Central Bank. The Central Bank's opportunities and the high level of cooperation between the two organizations allow keeping SOFAZ's gold assets.
As of October 1, 2012, the volume of gold in SOFAZ investment portfolio is 10 tons 851 kilograms or 350,146 ounces. SOFAZ buys physical gold on the London precious metal exchange and temporarily stores it on the London stock of JP Morgan.
In total, SOFAZ plans to buy in stages about 30 tons of gold within two years in connection with a risk of price changes, SOFAZ head said.
According to SOFAZ investment strategy, approved by Azerbaijani President Ilham Aliyev as of December 29, 2011, up to 5 percent of SOFAZ total investment portfolio may be invested in gold in 2012.
SOFAZ was established in 1999. Its assets hit $ 271 million.
SOFAZ assets, as of Oct. 1, 2012, increased by 11.4 percent up to $33.192.4 billion compared to early 2012 ($29.8 billion).
It is predicted that by late 2012, SOFAZ assets reach the level of $34 billion.