SOFAZ preserves conservative policy in placing funds
Azerbaijan, Baku, Apr. 28 / corr Trend I.Khalilova /
In the first quarter of 2009 the State Oil Fund of Azerbaijan (SOFAZ) continued a policy of placing investment portfolio in short-term tools and funds placed for the term of up to five years constitute 99.89 percent of assets, SOFAZ Executive Director Shahmar Movsumov said.
Placement term of assets is one of important indicators currently. The tendency in the developed countries such as the U.S., Japan and UK is that short-term investments brig more income rather the long-term one. In this connection, beginning from 2005 the Oil Fund has placed its funds in short-term securities due to situation in world markets, and their share increase more than that in 2007.
Presently, 46.13 percent has been placed in securities for the term of up to one year, 49.41 percent from one to three years, 4.35 percent from tree to five years and 0.11 percent including 0.03 percent of income in T-bills from five to seven years.
Movsumov said SOFAZ continues its conservative policy with regard placing assets in securities. They are mainly placed in T-bills with high rating, awarded by international rating agencies such as Moody and Standard & Poor. Now 89.14 percent of SOFAZ assets has been placed in securities with "ААА" rating, 3.81 percent in "АА", 6.7 percent - "А", 0.29 percent процента - "ВВВ", 0.06 percent in the rest. The SOFAZ assets cannot be placed in securities lower than investment rating.
SOFAZ assets have been partially placed in securities, and monetary market tools (deposits and accounts). Only 0.03 percent was placed in been T-bills. At present, 46.18 percent of SOFAZ assets was placed in T-bills of agencies and international organizations, 38.72 percent in sovereign securities, 6.19 percent in deposits and monetary market tools and 0.95 percent in bank accounts.
Geographical placement of SOFAZ assets is as follows: 55.53 percent is placed in European countries, 28.84 percent in North America, 13.31 percent in international financial organizations, 1.52 percent in Asia, etc.
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