OREANDA-NEWS. September 20, 2011. In recent years, expanding its activities in international financial markets, the International Bank of Azerbaijan has contributed to the success of trade in the commodity and bond markets, reported the press-centre of IBA.

It should be noted that the economy of U.S. and several European countries that endured the global crisis have not yet recovered, which is evidenced by a number of economic indicators. Interest rates on the currency of the world's leading power is still at historic lows, and in the medium term, there are no fundamental assumptions for the rise of the dollar. In the past, higher yield could be achieved through a simple investment in high-quality U.S. bonded debts and various short-term deposit instruments.

Historically, most of the liquid assets of the International Bank of Azerbaijan was placed on short-term deposits in major U.S. and European banks. But, given the continuing policy of "cheap money" of the leading central banks in the world, this strategy is no longer justifying itself. In this connection, IBA has reoriented itself to some extent, to the commodity (gold) and foreign exchange (different currency pairs) markets, as well as to the debt (bond) market in developing countries. Despite the fact that this strategy is implying somewhat greater risks, however, it enables more efficient and profitable management of assets and achievement of their diversification.

In the commodity market, the IBA is mostly focused on the precious metals market, and especially, on gold. To date, gold is one of the most reliable instruments of investments taking into account the current state of the global economy, and the fact that the recent lowering of credit rating of the U.S. and its growing budget deficit. Thus, today there is no any adequate alternative to gold both for states and investors. Moreover, gold is a reliable guarantor against the volatility in the currency market and stock exchanges.

We do not expect any long-term reduction in the price of gold due to the fact that there are no significant prerequisites for radical changes in the global economy for the better. According to our expectations, this precious metal will be for some time the most reliable tool that can consistently generate profits. Also, taking into account the high degree of direct correlation between the world's leading economies, gold will remain a reliable and somewhat conservative tool for the medium term investment. In addition to gold, investors are also interested in silver, copper and other precious metals.

Taking this opportunity, I would like to note that in a short time the IBA will launch a new product - the "gold deposit". This product will allow customers to take positions in gold without its physical purchasing. Thus, the "gold deposit" will be interesting enough for a wide audience, making the emphasis on reliability and stable income as gold over the entire period of its existence has been rising in price. In addition, this product will be a great tool to diversify our clients' investments. We plan to launch the product in the near future, and more detailed information will be available soon. In addition to the "gold deposit", it is planned to introduce the "oil deposits", as well as other interesting investment products to our customers.

Returning to the subject of investment and trade policies of the IBA, it is worth noting that the debt markets in countries such as Turkey, CIS countries, including Russia, are also of great interest in terms of stability and profitability. Moreover, the economy of these countries are not fully correlated and thus ensure a more conservative and successful risk management. At the moment, the average yield on the bonds of "blue chips" of Russia, Turkey and other CIS countries in the portfolio of IBA is 4-5% per annum. Along with this, the growth of quotations is also quite stable, which provides additional income. It is also worth noting that the IBA is mostly focused on large and liquid releases of large issuers with the investment rating and priority to the financial and oil and gas sector. In the medium term, we expect that stability in the debt markets in developing countries will be maintained because of the high volatility in global markets.

The IBA is also an active player in the forex market and this makes it possible to take positions in different currencies and generate more revenue. The major currency pairs, which the IBA sells are EUR / USD, GBP / USD, USD / CHF. Taking into account the high volatility in the market, the IBA uses strict limits to avoid significant losses. Trading in financial markets involves significant risks, and therefore for successful risk management the IBA often resorts to a variety of hedging instruments. The main hedging instruments are currency swaps, put and call options, interest rate swaps, as well as combinations of different strategies. In the medium term it is planned to introduce the more advanced systems to manage risks.

Summarizing the above, I would like to emphasize once again, that the IBA focuses on different markets, thus forming a portion of profits from trade operations.