Azerbaijan's SOFAZ reduces investment in bonds and money market instruments

Baku, Azerbaijan, May 4

By Azad Hasanli – Trend:

The State Oil Fund of Azerbaijan (SOFAZ) reduced the share of bonds and money market instruments in the investment portfolio from 76.5 to 74 percent in January-March 2019, Trend reports referring to the fund's report.

According to the report, the fund prefers to invest in securities with a high rating. As such, 38.7 percent of investments in bonds and money market instruments fall on assets with an "A" rating, 22.1 percent on assets with an "AA" rating, and 30.6 percent on those with an "AAA" rating, with the remainder (7.4 percent) consisting of securities rated "BBB" and assets that do not have an investment rating (1.2 percent).

Moreover, 45.3 percent were invested in medium-term (1 to 3 years) bonds and money market instruments, 29.6 percent in short-term (up to 1 year) ones, 9.9 percent for instruments with a circulation period of 3 to 5 years, and 15.2 percent to those with a circulation period of more than 5 years.

The State Oil Fund of Azerbaijan was established in 1999, and its assets at that time amounted to $271 million.

According to the regulations on SOFAZ, its funds can be used for the construction and reconstruction of strategically important infrastructure facilities, as well as solving important problems.

The main objectives of SOFAZ consist of accumulating funds and allocating the Fund's assets abroad for minimizing the negative impact on the economy, preventing the 'Dutch disease' to some extent, ensuring the accumulation of funds for future generations and maintaining current socio-economic processes in the country.

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