July 23, 2012 / 4:22 PM / 5 years ago

Azeri oil fund to spend $600 mln on MSCI World shares

BAKU, July 23 (Reuters) - Azerbaijan’s $33 billion oil fund plans to spend at least $600 million on investing abroad in shares of big companies traded under the MSCI World Index from September 2012 and to keep buying gold and currencies, its executive director said.

The state oil fund holds proceeds from oil contracts, oil and gas sales, transit fees and other revenues. It has been used to finance social spending and infrastructure projects.

Its transfer to the country’s state budget in the first half of 2012 was 4.6 billion manats ($5.8 billion).

Most of the fund is now invested in sovereign debt, although it has not said which countries’ bonds it holds.

“The State Oil Fund, with the help of UBS Global Asset Management and State Street Global, plans from September to purchase shares of well-known world companies, which are under the MSCI Index,” Shakhmar Movsumov told reporters on Monday.

“We have disbursed $600 million at this stage for these tasks.”

Assets of the fund were $32.7 billion at July 1, 2012, having risen from $32.0 billion at the end of 2011. The fund expects its assets to rise to $34-$35 billion by the end of this year.

Movsumov said the fund had started buying gold abroad from February 2012 and planned to buy 15 tonnes a year in 2012 and 2013.

“Our gold investment fund has already reached 6.85 tonnes by the beginning of July,” Movsumov said.

He added the fund’s gold was stored in JP Morgan storage in London.

Movsumov said the fund had also started buying Australian dollars and Turkish lira and planned to buy Russian roubles in the “coming weeks.”

“We have purchased 200 million Australian dollars and 800 million Turkish liras and ready to spend another $400-$500 million on buying Russian roubles,” he said.

The oil fund’s revenues in the first half of 2012 were 7.39 billion manats, while spending was 4.88 billion manats.

$1=0.79 manats Reporting by Afet Mehdiyeva; Writing by Margarita Antidze in Tbilisi; Editing by Anthony Barker

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