Azernews.Az

By Gulgiz Dadashova

Azerbaijan's state oil fund SOFAZ, an entity that accumulates and manages the country's oil and gas revenues, announced that it is keen in expanding its currency portfolio by late 2013.

SOFAZ Head Shahmar Movsumov said that the fund is decisive to include Yuan in its currency portfolio this year.

Movsumov said that SOFAZ is currently working on a procedure to enter the Chinese market for the inclusion of the Yuan in the currency portfolio.

"There is a certain process, passing which we can gain access to the Chinese market," he said.

Currently, the currency structure of the SOFAZ investment portfolio is as follows: 50 percent of the assets are held in US dollars, while 40 percent in euros, 5 percent in pounds, and the rest -- in Russian rubles, Turkish lira and Australian dollars.

Referring to the property acquisitions around the world, Movsumov said that SOFAZ plans to buy property in South-East Asia by late 2013.

"We are currently searching for commercial real estate in the region," Movsumov said.

According to SOFAZ's investment strategy, up to five percent of its investment portfolio may be placed in stocks, up to five percent in real estate and five percent in gold.

Lately, SOFAZ said it intends to invest about $1 billion in commercial real estate in one of the Asian countries in 2013.

SOFAZ now considers the possibility of investing in commercial real estate in Singapore, China, Japan, South Korea, Hong Kong and Australia.

In late 2012, the number of SOFAZ subsidiaries abroad reached eight. All created SOFAZ subsidiaries are required to manage the real estate abroad.

SOFAZ subsidiaries in Russia and the UK own investment property in these countries. In turn, the subsidiaries in Luxembourg and France were set up in order to acquire the property and ensure maintenance of investment property in Europe.

Also, Movsumov said in 2013 the Fund seeks to preserve its own assets at least at the level of the early this year.

As of early 2013, SOFAZ assets amounted to $34 129.4 million. As of July, SOFAZ assets, amounted to $34.678.4 million with an increase of 1.6 percent compared to the beginning of 2013.

"We hope that the assets will remain at the level of early 2013, and maybe even increase," he said.

SOFAZ assets are held partly in securities and money market instruments such as deposits and bank accounts. At present, 25.22 percent of the investment portfolio is held in the bonds of agencies and international organizations, 12.2 percent in sovereign debt securities, 9.58 percent in financial bonds, 23.59 percent in corporate bonds, 24.22 percent in short-term commercial papers, 5.17 per cent in guaranteed bonds, 0.1 percent in municipal bonds, 6.91 percent in deposits and money market instruments, 2.76 percent in gold,1.75 percent in real estate and 2.15 percent in shares.

SOFAZ was established in December 1999 by a presidential decree. Its primary objectives are to help maintain macroeconomic stability in the country and to generate wealth for present and future generations.

Projected total cost (the average amount) of the SOFAZ investment portfolio for 2013 was set at 25.2 billion manats, while the figure was projected at the level of 23 billion manats in late 2012.