SOFAZ: Brexit Did Not Cause Losses to SOFAZ

The State Oil Fund of Azerbaijan (SOFAZ) said that short-term changes in exchange rates caused by the results of the referendum (Brexit) on the termination of the UK's membership in the EU did not cause any losses or profits to the SOFAZ portfolio.

"Both the financial instruments of the State Oil Fund and high diversification of the currencies create conditions to protect its current investment portfolio," SOFAZ said in a statement.

The Fund noted that the results of the referendum, creating uncertainty, caused sharp volatility in global financial markets.

"This is, first of all, reflected in global stocks and the currency market. All major stock indexes fell more than 5%, rates of the pound and the euro fell by approximately 10 and 3% respectively. Naturally, such a drastic change had a negative impact on all investment funds and bank portfolios," the report said.

It also said that the Fund’s equity investments account for about 10% of total assets. The remaining 90% are placed in securities with a stable income, real estate and gold. The Oil Fund announces the stability of these assets, as well as the sharp rise in the value of gold.

As SOFAZ noted, "the Fund's investment portfolio funds can be placed in assets denominated 50% in USD, 35% in the euro, 5% - in British pounds, and the remaining 10% - in foreign currency assets of the Group of Seven and the European Monetary Union".

The statement by SOFAZ was made in the wake of widespread media reports that the Fund lost $ 86 million due to the falling value of GBP against USD as a result of the referendum in the UK. -0-