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With the increase in global trade and global investments. foreign exchange exposures of Companies are increasing consistently. The exposures emanate mostly from exports, imports, low-cost foreign currency borrowings, or investment abroad. There is always a scope of improving foreign exchange risk management by availing of cutting-edge advisory services.
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Foreign Exchange services that we provide
Cost reduction on import payments through import hedge strategy
We will monitor your payments bill by bill date by date and will advise at the right time to hedge along with specific advice on hedge instruments, price and tenor. Objective will be to minimise your payment Fx rate compared to either an unhedged position or against forwarding premium.
Rate improvement in Exports through Export hedge strategy
We will be monitoring your order book, invoice book, and also projected annual exports on a daily basis. We will advise you on when to hedge, how much to hedge, hedge instrument, right rate, hedge tenor, etc. We will help in the execution of the hedge and in any setup with the bank if required. The objective here is to achieve a high annual budget rate and also a higher realization rate compared to an unhedged position or forward rate. The inflows which come, whether to early utilize or convert at the market will also be advised.
Loan interest rate reduction
We will be evaluating your working capital and term loan portfolio. On the working capital, we will advise you when to go for PCFC, PCRE, EPC, FCTL, CC, CP, etc, and what rate you should get. On the term loan side, we will advise you on ECB, FCTL, RTL, and how you can manage Foreign currency risk or fixed floating risk so that overall you achieve cost savings.
Risk Reduction - Limit P&L volatility
We do not focus on savings alone but on risk-adjusted savings. Hence our strategies are conservative and limit risks both economically and on an accounting basis
Ensure stability even if currency crisis happens or sharp move happens
There are times when your functional currency INR has moved sharply. Our strategies ensure that in such a scenario, you will never be caught off guard.
Implement discipline in forex management
We proactively reach out and ensure that there is required discipline in your forex management, and it is not put into the backburner during stable times.
Educate and introduce options and swaps for hedging where required.
Using options help at times. However, option-based hedging should not be done without deep understanding. We educate and handhold companies in understanding vols surface, Greeks like delta, gamma, and how to use the Greeks for decision making and monitoring.
Analysis and Evaluation of alternative strategies on following parameters
IRR or net effective interest cost with hedging, Break-even analysis, Cost & Risk optimization, Regulation, Accounting impact, Cash impact, value at risk impact.
Advising on specific hedging and risk management decisions of the company on regular basis
Review every-day morning and afternoon by Senior advisors, Morning Customised advise Interim advice during the day if required Follow up during the day to ensure advice is implemented timely and not missed out
Strategizing and implementation of hedge execution leading to cost reduction
This will include getting the right price on hedge execution, Reduction of credit charge, Avoid trending mark-ups, Narrowing Bid-Offer spread, Using nuances of hedging to improve price, Unwind value calculation, and negotiation strategy
Providing regular market research, updates, data analysis, webinars, etc
This will include- Daily morning and evening update,Market Research Reports,Exclusive Reports,Webinars on Currency and related areas, Global markets, Industry movements etc ,Analysis and assisting in presentations for Board and Investor meetings if any
Training and capability building
This includes- Regular query resolution and explanation of practical concepts,Structured Training to senior management on specific areas/complexities as required ,Annual workshop with IIM Calcutta
Assisting companies in evaluation of documents
Hedge term sheets, Hedge covenants, Hedge deal confirmation, ISDA etc
Help in arranging hedge bank if needed
Support in counterparty selection, Arranging hedge lines in favorable terms ,Selection of right bank based on hedge type
Implementation of sophisticated methodologies of risk management
Live real time MTM, Value at Risk, Risk control, MIS & Control set up
MTM Valuation, Quarter End Valuation Certificate, CVA & DVA.
We provide a third-party valuation certificate of hedge instruments which is well accepted in the market and CVA, DVA calculations as well if required. Besides we add value to corporates by negotiating well for unwinding values if required
Performance Reviews Weekly Performance reviews
Meeting and Calls on regular basis for “day to day” operations,Performance review weekly on strategy and plan with the Managing Director/Director ,Interim Assessment of performance based on the “objective to be achieved “for Your Company ,Quarterly Assessment of performance based on the “objective to be achieved for Your Company
Global Best Practices in Treasury
Updates to the client on Global best practices and assessment of the clients “Best practices and opportunities” Support in working out the Risk Management Policy
The right Foreign Exchange decision can save millions for corporate. Taking the right decision at the right time makes the difference.
Our Events are spread across the year. Our focus is to have workshops and knowledge sessions that increase the effectiveness both of an individual and an organization. The sessions are structured on practical relevant operations aspects. We also have sessions on updated, current, relevant market movements and practices, regulations, knowledge, and technology. All training sessions are free for our advisory retainer clients. Clients can register by sending us an email to [email protected]. Few of our training sessions are complimentary for everyone. Explore what we have for you.
USDINR Option Strategies for Export & Import Hedging–Part III
Date:- 23rd September 2021
Time:- 5pm-6:30pm IST
Fee:- INR 9,000
Understanding option pricing and volatility surface. The implication of risk reversals and strangles. Understanding inputs to Black Scholes formulae and practical implications. Understanding Greeks like Delta, Gamma and their practical use while hedging.
Libor to SOFR Transition Management for Corporates & Institutions
Date:- 28th September 2021
Time:- 5pm-6:30pm IST
Fee:- INR 9,000
As Libor will be phased out, and SOFR will chip in – what implication the same will have on your loan book. What are implications for the hedges like IRS, Cap, Floors, etc? Should you go with ISDA protocols? How will you manage to fall back clauses?
+ Libor Outlook
Hedge Accounting for Fx and rates to avoid P&L fluctuations – Part II
Date:- 30th September 2021
Time:- 5pm-6:30pm IST
Fee:- INR 9,000
How to implement hedge accounting, the establishment of hedge effectiveness, accounting entries, treatment of option premiums, handling pre-utilization and other practical operational Q&As. How to do prospective and retrospective testing?