SOFAR Sees No Necessity in Reconsideration of Currency Composition in its Portfolio

Business Materials 31 January 2007 11:48 (UTC +04:00)

The State Oil Funds of Azerbaijan (SOFAR) does not feel the necessity to reconsider the structure of its currency portfolio, Trend reports.

Shahmar Movsumov, the SOCAR Executive Director, stated to a news conference dedicated to results of 2006 and plans for 2007, that SOFAR's assets were distributed in the following way: $801.43mln (55.1%), in European currency (37.2%) and pound-sterling (5.6%).

In compliance with SOFAR's management rules the currency diversification occurs in the following way: 55% placed in USD, 35% in euro, 5% in pound-sterling and the rest, 5%, in currencies of leading world countries with a rating of A. SOFAR was less active in the placement of funds in currencies of other countries, so 5% of was distributed among three major currencies (US dollar, euro and pound-sterling).

Last year profitability, by the government from funds in dollar made up 5.2%, in euro вЂ" 2.7% and pound-sterling вЂ" 4.7%.

Meanwhile, 2.1% of SOFAR's assets are in Azerbaijani currency. Movsumov said that the profits from the management of SOFAR finances in 2006 made up 2.9%, which is explained by the consolidation of the manat in respect to dollar. The profit in basic currency (USD) equaled 8.5%. Such profitability is explained by the consolidation of the euro in respect to USD. Moreover, the Libor over 3 months was 5.36%.