2023-06-27 11:04:41
Last year, the State Oil Fund (SOF) had no investment income, on the contrary, its investments lost 2 billion 461.3 million US dollars (-5.2 percent). This was caused by the depreciation of bonds and stocks bought by the Oil Fund.
“The fund’s assets, equal to 45.03 billion US dollars last year, increased to 49.03 billion US dollars by the end of the year. 62.1 percent of the total portfolio was invested in debt obligations and money market instruments, and 19.6 percent was invested in shares. Real estate made up 6.2 percent of the portfolio, and gold investments made up the remaining 12.1 percent,” the SOFAZ financial report for 2022 states.
However, according to the report, from the date of its establishment to January 1, 2023, SOFAZ received a total of 7.8 billion USD from investments, which is equivalent to a 2.3 percent return on an annualized basis.
Economist Gubad Ibadoglu told RFE/RL that if SOFAZ had effectively managed its currency funds in a transparent and accountable manner, the profitability level would not have fallen to negative (-) 5.2 at the end of the year: “Unfortunately, there is no transparency and accountability. For example, the Oil Fund participates in the real estate market and owns certain office and business centers. But they gave its management to 10-15 companies. There is no information about how those companies are selected, whether there are open and competitive tenders, what criteria are used as a basis.”
According to the economist, the financial markets were in turmoil last year: “Of course, more professionalism was required to win in the market. It is true that the professionals also faced some losses, but the level of their losses is not as high as that of the Oil Fund. If the loss was up to 3 percent, it could be explained by objective reasons. But the 5 percent loss shows that there are subjective factors here.”
The Oil Fund was established in 1999. This institution has received funds since 2001. By 2020, it was announced that this fund will receive approximately 160 billion dollars. On April 1 of this year, it was reported that 53 billion 437.6 million US dollars remained in the Fund. It was announced that the remaining funds were transferred to the country’s budget and spent on many projects.
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