BAKU, Azerbaijan, April 17
By Fidan Babayeva - Trend:
During the first quarter of this year, the negative difference due to short-term fluctuations in market value associated with the revaluation of assets of the State Oil Fund of Azerbaijan (SOFAZ) amounted to 2.1 billion manat ($1.2 billion), Trend reports referring to SOFAZ’s report for the first quarter of 2020.
According to the report, the difference arising due to exchange rate fluctuations in extra-budgetary expenses of SOFAZ amounted to 281.1 million manat ($165.3 million).
Given early transfer payments, as well as short-term volatility recorded in the market value of SOFAZ investments by the end of the first quarter of 2020, the assets of the Fund amounted to $41.3 billion.
“As known, the coronavirus pandemic posed serious threats to the global economy during the first quarter of this year. Thus, quite serious fluctuations in supply and demand take place in all countries of the world, unemployment is growing, and reputable international financial institutions forecast a serious slowdown in world economic growth at the end of the year. As a result, international financial markets, including stock exchanges of developed countries, are experiencing serious fluctuations,” the report said.
“During this period, the value of world stock indices decreased by some 20-25 percent, which led to negative profitability of about 14-16 percent for many similar sovereign funds, in which a significant share in the allocation of funds for assets is invested in stocks. All this, of course, impacted the investment portfolio of SOFAZ," added the report.
State Oil Fund of Azerbaijan was established in 1999 with assets of $271 million.
According to the SOFAZ regulations, its funds may be used for the construction and reconstruction of strategically important infrastructure facilities, as well as for addressing important national problems.
(1 USD = 1.7 AZN on Apr. 17)
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