Azerbaijan, Baku, November 18 / Trend, E. Ismailov /
Turkey and Russia have been included into a list of countries where assets of the investment portfolio of the State Oil Fund of Azerbaijan (SOFAZ) can be placed as the two countries are defined as countries with large capital market and having large share in trade and economic relations with Azerbaijan, the SOFAZ told Trend on Friday.
The rules of SOFAZ currency assets storage, placement and management have been changed for the first time over the past decade, an illustration of SOFAZ's conservative policy. Particularly, the SOFAZ is now authorized to invest in shares, real estates, and gold. A list of countries where assets of the SOFAZ portfolio of investments can be placed has been expanded.
Besides, the change of the currency composition indicates that the Fund intends to expand its activities.
"Latest tendencies of worsening of global financial crisis alongside with low interest rates in developed countries have substantiated an increase of capital flight to countries with developing economy," the SOFAZ reported.
In compliance with the existing currency composition, the SOFAZ places its funds in developing countries solely in assets denominated in US dollars, euros, and UK pounds.
The changes of the SOFAZ currency assets storage, placement and management rules also allow it investing assets in state and corporate bonds and in T-short instruments denominated in the national currencies of Turkey and Russia.
As to whether the SOFAZ will partake in the process of investing in construction of a State Oil Company of Azerbaijan (SOCAR)-owned new oil refinery in Turkey, the SOFAZ reported the following: "The Fund currently does not explore the opportunity of investing in the project of construction of a SOCAR-owned new oil refinery in Turkey".
SOFAZ was established in 1999; its assets amounted to $271 million.
Based on SOFAZ's regulations, the funds may be used for the construction and reconstruction of strategically important infrastructure facilities, as well as solving important national problems. In 2001-2009 special attention was drawn to the development of the oil and infrastructure sectors, as well as the non-oil sector of the country. At the moment, a number of important projects in
irrigation and transportation are financed at the expense of the funds.
The main purposes of the fund are: accumulation of funds and placement of the fund's assets abroad to minimize the negative impact on the economy, preventing a "Dutch syndrome" to ensure savings for future generations and to maintain the current socio-economic standard in the
country.