SOFAZ to boost share stake in investment portfolio
By Aynur Jafarova
Azerbaijan's state oil fund SOFAZ will increase the stake of shares in its investment portfolio from the current five percent to 10 percent against the background of recovery of the global economy, Baku-based Trend news agency reported on December 6, citing Shahmar Movsumov, the Executive Director of the fund.
This is envisaged by the draft investment policy of the fund for 2014 adopted by SOFAZ Supervisory Board and submitted for the approval of the Azerbaijani president.
Movsumov also said the stake of shares will be increased through decreasing the share of bonds to 80 percent.
According to SOFAZ's investment strategy, up to five percent of the fund's total investment portfolio may be invested in stock, up to five percent in real estate, and another five percent in gold.
"The global market is getting out of its protracted crisis. We already see certain features indicating that the economy is recovering, therefore, we believe that there is a real opportunity to start to buy shares in anticipation that the economy will grow," Movsumov said.
SOFAZ, an entity that accumulates and manages Azerbaijan's oil and gas revenues, was established in 1999 with $271 million in assets. The main purpose of the fund is the accumulating funds and assets placement abroad in order to minimize any negative impact on the economy, preventing the "Dutch disease", ensuring savings for future generations, and maintaining the current social and economic standards in the country.
About 48 percent of the total investment volume of SOFAZ in the first nine months of 2013 was in the U.S. dollars. The mentioned figure is over $17.05 billion.
The SOFAZ's foreign currency assets by September 30, 2013 amounted to $35.809 billion, compared to $34.129 billion at the beginning of the year.
Around 40.1 percent of the investment portfolio is concentrated in euros (over 10.553 billion euros), 5.2 percent in British pounds sterling (over 1.146 billion pounds sterling), 1.2 percent in Turkish Lira, 0.5 percent in Australian dollars, and 1.8 percent in Russian rubles.
The rest of the portfolio, 3.2 percent, is concentrated in gold with amount of 850.146 troy ounces (26.44 tons).