Which equities in Azerbaijan are more profitable in terms of investment?

There are stocks and bonds of different countries, bonds of the Ministry of Finance, and the notes of the Central Bank in the equities market of Azerbaijan. Not all of them are equally reliable and profitable.

Expert in financial markets, Jafar Ibrahimli, noted that state-secured bonds are accepted as minimum-risk bonds in the world.

“In terms of reliability, state-secured bonds, the Central Bank of Azerbaijan bonds, have the lowest risks in both the world and Azerbaijan. As for profitability, these bonds offer lower profits compared to those in the private sector. While the bonds issued by private companies have the profitability of 10 to 11%, the state-secured bonds offer the lower rates, with their annual yield at 5 to 6%.”

The expert said that the trust in SOCAR bonds has grown over the past years.

“In terms of corporate bonds, the most popular in the Azerbaijani equities market are the SOCAR bonds. Initially, the population viewed them as not so much reliable in the period of devaluation. In the further period, the timely payments on these bonds dramatically increased the trust in them. Today, the profitability of these bonds has dropped to around 3%, though these bonds were issued with the profitability of 5%.”

Ibrahimli also spoke about the advantage of investing in equities.

“Individuals in Azerbaijan can assess assets in their hands mainly in banks or in equities. The deposit rate at banks is currently lower compared to the previous years. The advantage of equities for the population is that they can sell these equities anytime compared to banks, while there are some restrictions on deposits.”

Regarding the profitability of the stock market, the expert said:

“As the stock market is not liquid enough today, we do not observe public interest in it. However, some companies and major banks give enough dividends to their shareholders and even offer more profit compared to the deposits in other banks. The stock market is considered risky for its stable-profit financial tools. However, people in Azerbaijan do not invest much in the stock market due to the limited turnover in the market and the small size of the market, in general.