SOFAZ investment portfolio hits 28 bln manats
By Aynur Karimova
The predicted cost of the investment portfolio of Azerbaijan’s state oil fund SOFAZ was set at 28.2 billion manats for 2015.
On January 19, Azerbaijani President Ilham Aliyev issued a decree approving the main directions (programs) on use of SOFAZ funds for 2015.
Forecasts for 2014 were set at the level of 27 billion manats, 25.2 billion manats in 2013, and 23 billion manats in 2012.
“In 2015, SOFAZ will implement an investment policy, which allows obtaining the maximum yield at a low risk of loss of main capital,” the fund said.
The main directions of expenditures of SOFAZ funds in 2015 will be financing some measures related to the accommodation and improvement of the social and living conditions of refugees and internally displaced persons; transfers to the state budget of 2015; financing a project on reconstruction of the Samur-Absheron irrigation system; financing construction of the Baku-Tbilisi-Kars railway line; financing the State Program on Education of Azerbaijani youth abroad in 2007-2015; and financing Azerbaijan's share in the Southern Gas Corridor project.
Currency structure remains unchanged
SOFAZ has not changed currency structure of its investment portfolio for 2015. Thus, 50 percent of its assets can be placed in U.S. dollar, 35 percent in euro, five percent in British pound, and the remaining 10 percent in other currencies.
Also, 80 percent of the total value of investment portfolio of the fund is set at the expense of money market instruments and debt market. In 2015, some 10 percent of the fund’s investment portfolio may be invested in stock exchange, up to five percent in real estate, and up to five percent in gold.
As in previous years, SOFAZ will hold over $100 million to support the liquidity of its funds at a level sufficient to timely and fully ensure money and other transfers in 2015.
These funds will be saved in short-term high-liquid tools of the money markets.
SOFAZ, an entity that accumulates and manages Azerbaijan's oil and gas revenues, was established in 1999 with an asset worth $271 million.
The main goals of the fund include accumulation of revenues, investment of assets abroad to minimize negative impacts on economy, prevention of the 'Dutch disease', ensuring savings for future generations, and maintaining the current social and economic standards in the country.