SOCAR bonds rise in price
By Sara Israfilbayova
Bonds of the Azerbaijani state oil company SOCAR, which enjoy the highest demand in the country's stock market, can be sold on the stock exchange for $1005 and bought for $1007.
The reason for the price increase is the growing demand for bonds, Azertac reported citing PSG Capital, which acts as a market maker.
The main reason for such a high demand for SOCAR bonds is their high reliability and profitability, a guarantee of the return (the value of bonds never falls below $1,000 and can be exchanged for cash at any time), as well as fulfillment of obligations under these bonds on schedule and with high discipline.
PSG Capital reported that only in August, the volume of operations on purchase and sale of SOCAR bonds in the secondary market hit $10 million.
In the first seven months of 2017, the volume of operations on purchase and sale of SOCAR bonds was $63.2 million, which makes up 77.3 percent of the total bond market for the same period.
To date, the volume of operations on SOCAR bonds hit $106.2 million.
SOCAR issued dollar bonds with a volume of $100 million in September 2016. The period of their circulation is 5 years, and the rate is 5 percent. In the secondary market, trades on the bonds of SOCAR began on October 17, 2016.
The nominal value of the bonds is $1000 and the annual yield of each bond is $50, which makes these bonds the most profitable in the financial market.
SOCAR bonds on the secondary market along with Azerbaijani citizens can be purchased by foreign individuals and legal entities. Over the past period, foreign investors have been interested in these securities.
The interest on bonds is being paid once a quarter. To date, 3 interest payments on bonds have been made [January 17, April 17 and July 17]. Next payments will be made on October 17.
SOCAR is a wholly state-owned national oil company headquartered in Baku, Azerbaijan. The company produces oil and natural gas from onshore and offshore fields in the Azerbaijani section of the Caspian Sea.
The company includes such production associations as Azneft (the enterprises producing oil and gas onshore and offshore), Azerikimya (the chemical enterprises) and Azerigas (distributor of gas produced in the country), as well as oil and gas processing plants, service companies, and the facilities involved in geophysical and drilling operations.
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