Euro share in Azerbaijani State Oil Fund’s investment portfolio reduced

The State Oil Fund of Azerbaijan (SOFAZ) will increase shares in the structure of its investment portfolio from the current five to 10 per cent.
Azerbaijani President Ilham Aliyev has recently issued a decree approving the main direction of the programme for using SOFAZ funds in 2014.
The shares will be increased through decreasing the bonds to 80 per cent, Movsumov said.

Today some 85 per cent of the total value of the SOFAZ investment portfolio is formed by money market tools and debt security market. Up to five per cent of the investment portfolio may be invested in shares, up to five per cent in real estate and up to five per cent in gold in 2014 as in 2013.

Earlier SOFAZ Executive Director Shahmar Movsumov told Trend that this decision was caused by signs of recovery in the global economy which comes out of the protracted crisis.

Therefore, SOFAZ will buy shares in the expectation that the economy will grow.

Moreover, SOFAZ will change the currency structure of its investment portfolio in 2014. Today 50 per cent of the assets can be placed in U.S. dollars, 40 per cent in euros, five per cent in British pounds and the remaining five per cent in other currencies. However, the euro share will be reduced to 35 per cent in 2014, while the share of other currencies will be increased from five to 10 per cent.

“This is connected with the fact that SOFAZ is in the process of buying property in other countries, including Asia. This property must be assessed in the local currency.

SOFAZ was established in 1999. The main goals of the State Oil Fund include: accumulation of resources and placement of the fund’s assets abroad in order to minimise 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.