Experts: Demand soars for SOCAR bonds

Baku. 19 January. REPORT.AZ/ First interest payments for bonds released by the State Oil Company of the Azerbaijan Republic (SOCAR) soared interest of people for these securities. Report informs, investment companies have stated.

According to companies, number of applications to purchase SOCAR bonds rose after payment of interests: “Realization of expectations, that is payment of interests for bonds, boosted citizen’s trust in bonds as an investment tool. On the other hand, being prompt and profitable investment tool, the SOCAR bonds gain the upper hand against competitors in the market”.

Analyst of “Kapital Menecement” investment company Jafar Ibrahimli believes that one of reasons is that people were holding waiting position: “Some investors were holding waiting position. People wanted to see how the promises related to bonds will be fulfilled; will they be bought back in time; will the issuer and market-makers fulfill set terms; will interests be paid properly and in time”.

The expert says all terms concerning bonds have been fulfilled so far: “I think this will be more attractive for investors and will boost their interest for bonds”.

According to him, there aren’t any comparable with SOCAR bonds in terms of profitability and other parameters USD-based tools in the market: “Finance ministry issued USD bonds with 3.5% interest in 2016, but later they ceased the issue”.

Banks, which provide other USD investment tools, cannot be compare with bonds as well: “If to consider insurance charges for bank deposits, their profitability is 3%. Some banks offer even 1-3% interest”, J.Ibrahimli told.

Notably, SOCAR issued 5-year bonds with total value 100 mln USD. Nominal value of one bond is 1000 USD. Annual interest rate of SOCAR bonds is 5%. Interests are paid once a month with USD. Bonds are eligible for sale in the market any time and can be returned seller with at least nominal price.

Annual interest payments were made firstly on January 17. Thus, the company paid 1.25 mln USD interest for first three months. Next payments have been scheduled to April, July and October.