Azernews.Az

By Aynur Jafarova

Azerbaijan's state oil fund SOFAZ will increase shares in its investment portfolio from currently five percent to 10 percent.

SOFAZ, an entity that accumulates and manages Azerbaijan's oil and gas revenues, will realize the goal through decreasing the bonds to 80 percent.

Today some 85 percent of the total value of the SOFAZ investment portfolio is formed by the capital market tools and the debt security market. Up to five percent of the fund's total investment portfolio will be invested in the stock market, up to five percent in the real estate market, and another five percent in the gold market in 2014 as well.

Earlier, SOFAZ Executive Director Shahmar Movsumov told Baku-based Trend news agency 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. In particular, it will reduce the euro share to 35 percent in 2014, while the share of other currencies will be increased from five percent to 10 percent.

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

Today, 50 percent of the assets can be placed in U.S. dollars, 40 percent in euros, five percent in British pounds and the remaining five percent in other currencies.

On December 19, Azerbaijani President Ilham Aliyev approved the budget of SOFAZ for 2014.

The budget bill has set SOFAZ's incomes at the level of over 11.626 billion manats and expenditures at over 11.349 billion manats.

Also, the projected total cost (the average amount) of the investment portfolio of SOFAZ for 2014 was set at 27 billion manats, the presidential decree approving the priorities of the program for using SOFAZ's funds for 2014 said.

For this year the forecast was 25.2 billion manats, versus 23 billion manats in 2012, and 19.4 billion manats in 2011.

"SOFAZ will implement an investment policy allowing maximal yield at low risk of capital loss in 2014," the document says.

SOFAZ 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.