Azerbaijani Chamber Of Accounts Calls For Strategic Coordination And Portfolio Adaptation At SOFAZ
(MENAFN- AzerNews)
Ulviyya Shahin
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The Chamber of Accounts recommended that the State Oil Fund
(SOFAZ) strengthen coordination with the State Oil Company (SOCAR)
and Azerbaijan International Operating Company (AIOC).
Azernews reports that this recommendation is
included in the Chamber's Opinion on the implementation of the
Fund's 2023 budget.
"The document noted discrepancies between Azerbaijan's share of
hydrocarbon production forecasts and performance indicators,
emphasizing the need for enhanced coordination with SOCAR and AIOC
in determining production forecasts."
The Chamber of Accounts proposed that SOFAZ establish a new
liquid portfolio.
"Given increased uncertainty in currency auctions, timely
fulfillment of obligations (transfers to the state budget),
additional costs (purchase costs, realization of potential losses),
and risks (difficulties in meeting benchmarks), creating a new
liquid portfolio to manage liquidity corresponding to potential
demand within the sub-portfolio is deemed appropriate," the
document stated.
"Due to the differing characteristics of private equity
investments (liquidity, long-term holding) compared to shares,
consideration should be given to segregating the private equity
sub-portfolio from SOFAZ's general equity portfolio and placing it
in a separate sub-portfolio."
Furthermore, the Chamber emphasized the need to finalize
benchmarks that fully reflect the Fund's objectives for private
equity investments, considering their illiquid nature.
"Given the time required to construct targeted sub-portfolios,
as well as efforts to select and approve suitable benchmarks, final
approval of benchmarks for sub-portfolios and their inclusion in
relevant regulatory acts governing the Fund's activities should be
addressed."
Additionally, the Chamber stressed the importance of exploring
sectors with long-term growth potential to adapt to uncertainties
and evolving trends in global real estate markets.
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