Sales of SOCAR bonds hit record

By Azernews

By Nigar Abbasova

USD bonds of Azerbaijan’s state energy major SOCAR hit a record high index in terms of sales. The volume of purchase and sale operations in January 2017 amounted to some $16.5 million.

PSG Capital, which acts as a market maker (broker-dealer firm that assume the risk of holding a certain number of shares of a particular security to facilitate its trading) of the bonds, reported that the securities market players conducted some 82 deals on the bonds within last month.

The volume of trade on the secondary market exceeded some $50 million. Some 72 percent of the bonds purchasers are new customers, while the remaining 28 percent are holders of these bonds.  

PSG Capital representative Ikram Safaraliyev said that the interest to SOCAR bonds has increased significantly following the first payment of interest on them. Besides, the financial instruments rapidly gained big popularity among foreign investors, particularly from Russia, Ukraine, Turkey, and Georgia.

The company issued some 100,000 dollar bonds with nominal value of each $1,000 in September 2016, while the bond sale on the secondary market was launched on October 18.

The annual interest rate on SOCAR’s bonds stands at the level of 5 percent. The figure is higher than the rates applied in reference to USD deposits placed in local banks, where the annual interest rate on dollar deposits currently stands at 2.5-3 percent.

The interest on bonds is being paid once a quarter. The first payment was implemented on January 17. On the first day of payment the owners received dividends worth 1.25 million manats (over $ 684,860).  Next payments are scheduled for April 17, June 17 and October 17.

The operations on the secondary market provided foreign individuals and legal entities with a right to buy bonds from their owners, as only Azerbaijani citizens and local companies had a right to obtain bonds on the primary market.  The highest price for each bond in the secondary market was fixed at the level of $1,024, while a bottom-low figure stood at $1,000.5.