SOFAZ to start applying new investment tools since 2012
Baku, Fineko/abc.az. State Oil Fund of Azerbaijan (SOFAZ) has determined itself with starting period of new investment tools application.
SOFAZs Executive Director Shahmar Movsumov stated that approval of the Funds new investment policy is expected after Head of the State endorses SOFAZs budget for 2012.
" We will pass it in our Supervisory Board and then submit for approval to the country President . Starting from next year we will start applying new investment tools ",- Sh. Movsumov said.
In his words limits and percents of assets which could be invested in new method will be defined in policy.
By Decree from 27 October 2011 Azerbaijani President Ilham Aliyev amended Decree #511 from 19 June 2001 on the approval of the Rules of storage, placement and management of foreign exchange funds of the State Oil Fund of Azerbaijan (SOFAZ).
Under the changes, the SOFAZ investment portfolio finances can be placed in long-term commitments of the G7 countries (U.S., Germany, France, UK, Italy, Canada and Japan), countries of the European Monetary Union, Russia and Turkey with a credit rating not lower than A (Standard & Poors and Fitch) and A2 (Moodys). At that, rates should not be below the level that eliminates currency risk in the Fund’s base currency (US dollar).
Besides, the requirements for managers running Fund’s money have been changed as well. Now they and their founders must have at least 5 years of international rating and asset management experience of at least $1 bn.
The Fund was also permitted to invest finances for deposits in central and commercial banks and other financial institutions, debt liabilities of states, international financial institutions, commercial organizations with a rating not below investment grade, as well as in shares of organizations with a rating not below investment grade, and in shares of mutual funds, gold and real estate.
The SOFAZ was also allowed place up to 5% of its investment portfolio in securities and deposits with a rating of BB- (Standard & Poors and Fitch) and Ba3 (Moodys).
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