Azerbaijan’s State Oil Fund strengthens in Asian market

Business Materials 2 September 2013 21:43 (UTC +04:00)

Azerbaijan, Baku, Sept. 2 /Trend E. Ismailov/

By late 2013 the State Oil Fund of Azerbaijan (SOFAZ) will expand its currency portfolio including Chinese yuan, SOFAZ head Shahmar Movsumov said.

According to him, SOFAZ is currently working over the procedure of entering into Chinese market within the framework of inclusion of yuan into currency portfolio.

"There is a specific process, after going through of which we will have access to the Chinese market," Movsumov said.

The total volume of the investment portfolio of SOFAZ in the first half of 2013 amounted to nearly $34.52 billion, or 99.5 percent of the total volume of assets. Particularly, in January some 47.7 percent of the total volume of the investment portfolio of the SOFAZ was concentrated in dollars ($16.46 billion). In its turn some 40.8 percent of the investment portfolio of the fund is concentrated in euros (10.78 billion euros), 5.1 percent is concentrated in British Pounds (nearly 1.16 billion pounds), 1.3 percent - in Turkish liras, 0.6 percent - in Australian dollars, and 1.9 percent - in Russian rubles.

The remaining part of the portfolio (2.6 percent) is concentrated in gold.

According to Movsumov the SOFAZ also plans to purchase a property in the South-Eastern Asia by late 2013.

"Currently, a search for a commercial property is being carried out in this region," Movsumov said.

According to the investment strategy of the SOFAZ, for the first time the fund will be able to invest up to five percent of the investment portfolio in the assets, up to five percent in the real estate, and up to five percent in gold.

The most recent purchase of SOFAZ was the shopping and office center Gallery Actor at Pushkin Square in Moscow. The cost of the purchase was $133 million.

Also earlier, the Oil Fund has purchased a property in London (for 177.35 million pounds) and in Paris (for 135 million euros).

As of July 1 SOFAZ assets, increasing by 1.6 percent compared with the beginning of 2013 ($34,129.4 million), amounted to $34,678.4 million.

The State Oil Fund was established in 1999, and at the moment its assets amount to $271 million.

The main goals of Azerbaijan's State Oil Fund include: accumulation of funds and placement of Fund assets abroad in order to minimize negative impact on economy, prevention of Dutch Disease to some extend, provision of fund's accumulation for future generations and support of ongoing social and economic processes in Azerbaijan.