Over half of assets of Azerbaijan State Oil Fund’s investment portfolio placed in Europe

Oil&Gas Materials 22 July 2014 16:06 (UTC +04:00)

Baku, Azerbaijan, July 22
By Emil Ismayilov - Trend:

As of January-June 2014, some 84.4 percent of the investment portfolio of the State Oil Fund of Azerbaijan (SOFAZ) was invested in financial tools for up to five years.

As of July 1, the total volume of SOFAZ investment portfolio is $37.550.2 billion, or 99.8 percent of the total volume of assets, according to the report.

Around 54.2 percent of SOFAZ investment portfolio is placed in securities for a one-year period, 28.4 percent for one to three years, 1.8 percent for three to five years and 4.7 percent for more than five years. Some 10.9 percent is kept in real estate, assets and gold, the report said.

As of June 30, 2014, around 24.8 percent of the investment portfolio is placed in securities with 'AAA' ratings, 23.8 percent in 'AA', 29.4 percent in 'A', 21.6 percent in 'BBB' and 0.4 percent in other securities. SOFAZ assets cannot be placed in securities with a lesser investment rating.

SOFAZ assets are partially placed in securities, tools of the monetary market such as deposits and bank accounts. Currently, 20.4 percent of SOFAZ investment portfolio is placed in bonds of agencies and international organizations, 8 percent - sovereign debt securities, 15.6 percent - financial bonds, 38.8 percent - corporate bonds, 11.9 percent - short term commercial securities, 5.3 percent - guaranteed bonds.

Around 7.4 percent of the investment portfolio is placed in deposits and monetary market tools, gold-3.4 percent, real estate- 2.9 percent, assets-3.8 percent, investments in the projects - 0.8 percent.

The assets of the investment fund were placed as follows: 55.18 percent in European countries, 19.56 percent in North America, 12.33 percent in the Asia-Pacific Ocean region, 1.05 percent in the Middle East, 5.03 percent in South America and 6.84 percent in international financial organizations, Africa - 0.01 percent.

As of July 1, 2014, SOFAZ assets increased by 4.86 percent compared to early 2014 ($35.877.5 billion) and were estimated at $37.622.4 billion.

SOFAZ was established in 1999 with assets of $271 million.

Based on SOFAZ's regulations, its funds may be used for the construction and reconstruction of strategically important infrastructure facilities, as well as solving important national problems.

The main goals of the State Oil Fund include: accumulation of resources and the placement of the fund's assets abroad in order to minimize the negative affect on the economy, the prevention of "Dutch disease" to some extent, promotion of resource accumulation for future generations and support of current social and economic processes in Azerbaijan.

edited by CN