appointment request
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8/9/2019 Appointment Request
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Karvy Stock Broking Limited
Karvy Comtrade Limited
Karvy Financial Services Limited
Karvy Realty (India) Limited
Karvy Capital Limited
Karvy Investor Services Limited
Karvy Data Management Services Limited
Karvy Computershare Private Limited
Karvy Insurance Repository Limited
Karvy Global Services Limited
Karvy Inc , USA
Karvy Global Services Inc , USA
Karvy Middle-East LLC, Dubai
Karvy Asia Pacific Pte Ltd , Singapore
Fakhro Karvy Computershare WLL, Bahrain
Karvy Group
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Karvy – Financial Services for Corporates & Individuals
Corporate Individuals
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Currency Risk
Whether you are an individuallooking to travel abroad, or planning to send money to
loved ones overseas, you will be affected by currencymovement. Similarly, if youare in business of imports orexports of goods and servicesyou will either receive ortransfer money that will beaffected by currency
fluctuations.
Technically currency risk is variability in thevalue of an exposure caused by uncertaintyabout exchange rate changes.
Currency risk essentially comes from the
movement in the exchange rate between twocurrencies.
If you are in business or individual looking toreduce your currency risk and remove acertain level of uncertainty from your future
currency transactions there is tool called asHEDGING
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Volatility & Its Impact On Business
Profits
Business Margins are ranging between 5 to 15%
Currency annual volatility can range from 5 % to 10%
If Unhedged Volatility can turn Profits to Losses.
Past Volatility is not a measure of future Volatility
Indian Currency still relatively less volatile than Others
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Need to Manage Risks
Insure Against Adverse Exchange Rate movement
Project and protect Operating Profits
Forex Markets are Volatile and Uncertain
Achieve Budgets and Targets
Maintain sustainable business in light of stiff competition
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Areas of Impact
• Gross Revenues (Gross Rupee Revenue = ForeignCurrency Revenue x Current Exchange Rate)
• EBIT/PAT (Due to mismatch in currency of Revenues ¤cy of Expenses)
•Balance Sheet (Translation impact for Foreign CurrencyCurrent Assets & Fixed Assets)
From FinancialsPerspective
• Committed orders with frozen pricing
• Committed orders with open pricing
From BusinessPerspective
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Key Hedging Principles
We make profits from our Key Business Activity
We need to Monitor and understand Risk
Hedging / Forex Trading is not the main business Activity
Business Needs to have a stable Forex Policy – A MUST
You can not sell at Peak or Buy at Bottom
Basic Purpose is to protect Margins Or Marginally Gains
We need to take Calculated Risk & Not Blind Risk
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Forex Hedging Tools
Open
Various HedgingTools
Various HedgingTools
OPTIONs OPTIONs Combination Combination FUTUREs FUTUREs
Could be
speculative
Could be
speculative
Basic
hedging tool
Basic
hedging tool
Means of
Insurance
Means of
Insurance
Effective Optional
OPEN
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OTC VS Exchange CDS
Forwards (Banks) Futures (MCX-SX)
Price Transparency
Spot+/-Forwards +/- Banker’s margin No Possibility of any Manual Intervention
Client Depends upon Bankers Discretion 100% Transparency – Online Systems
Gain on cancellation paid on the maturity date -Only
in Specific Underlying Gain / Loss on Cancellation paid on Same Day Itself.
Margin / Brokerage 2 Paise to 80 Paise per USD 0.25 Paise to 3 Paise per USD
Spread Bid Ask Spread is 2 – 3 Paise Bid Ask Spread is 0.25 Paise
Market Timings 9.00 am to 4.30 pm 9.00 am to 5.00 pm
Options Contracts Tough Documentation & Restrictions Available to all – No Restrictions
Contract size Customized: Generally Starting from USD 50,000 Contract size is in Multiple of 1000 Currency Units
(USD,GBP,EUR) & JPY in 100000
Documentation
Credit Limits to be sanctioned and documentation to
be done for the process Basic KYC Documents
Underlying documents is needed No proof of underlying exposure needed
Marking to market Marking to market is a periodical task and usually
done on request
Exchange traded currency futures have an inbuilt
mechanism of paying/receiving the mark to market
difference based on the Daily Settlement Price.
Liquidity Subject to credit limits High
Settlement Physical Delivery Cash Settled
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Indian Currency Futures Markets
Trading Hours 9:00 AM to 5:00 PM (Monday to Friday)
Contract Size US$ 1,000
Price Quotation INR per USD
Tick Size INR 0.0025
Minimum Initial Margin 1.75% on first day & 1% thereafter
Contracts All months with a maturity duration of 12 months
Settlement Mechanism Cash Settled in Indian Rupee
Last Trading Day 2 working days prior to the last BD of the expiry month
Final Settlement Rate RBI USDINR Reference Rate
Final Settlement Date Last working day of month, except Saturday.
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Options
Corporates can also be on the Sell side of the Option ( which is not
allowed in OTC Market).
Apart from plain Vanilla positions, its possible to have structures also,
by using various combinations of PUT and CALL options.
Combination strategies can also be used as Cost reduction structure.
Futures and Options can be used in Combination.
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100% Open(Totally Exposed to Risk)
Hedging
Alternatives
100%
Forwards(A Loss Making
Proposition, at times
challenged
By RBI’s guidelines)
Mix of theThree (Futures,
Options &
Forwards)
Best possible strategy
100% Options
(Warranted in acute volatility, comes at a premium)
Objective is
To Minimize
Forex Risk
Hedging Strategy
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Currency Derivatives @ Karvy Currency Derivatives offered to clients from the
day of its introduction in India 29th August
2008
Membership with NSE, MCX-SX, USE and BSE
One of the leading Corporate brokers in
Currency Segment
Focus on Corporates with Forex exposure
Dedicated research & Corporate Desk
Exclusive CDS Branches at Hyderabad, Mumbai,
Kolkata, Delhi, Ahmedabad, Chennai,
Chandigarh, Ludhiana, Vishakapatnam,Lucknow and Jaipur
Convenience of booking orders through our
wide network of branches spread across 500
cities, or through our online terminal.
Monday, December 29, 2014
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Awards and Recognition
Zee Business award for India’s
“Best Market Analyst” in the“commodity fundamentals”
Awarded by the Finance Minister
Shri Pranab Mukherjee
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Exclusive Currency Research Department
(supported by Fundamental, Technical, Derivatives
Analysts.)
www.moneycontrol.com publishes our currency reports
on a daily basis
“Currency Insight” a Daily Report on Indian currency
markets
SMS Services to all our clients and team members
Provides timely Economic data & market updatesWeekly and Monthly Research reports published based
Fundamental research
Special Event Base Reports like RBI Monetary meet,
Budget etc
Customised Hedging strategies for Importers &Exporters
Intraday Trading calls on all the four currency pairs
with a success % of > 75% on a monthly basis with
good returns
Currency Research & Advisory
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Karvy‘s Strength your Benefits Study your exsposure, discuss and understand your risk profile and help you
devise risk management policy for your company
Provide customised hedging strategies using combination of forward / futures &options
Dedicated team with specialisation in forex and arbitrage to guide clients
Complete confidentiality of your exposure data and our market advice
Regular meetings to discuss the FX strategy and review existing portfolioperformance
We comprehend your business operations and resultant Fx risk managementobjectives
Forex managed accounts for HNI clients.
Karvy forex trading platform – online & through branches, online back officeaccess
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Rakesh : +919160777787/040-67406027
Email : corporate.currency@karvy.com
Currency Derivatives, Karvy Stock Broking Limited,
"Karvy House", 46 Avenue 4, Street No. 1, Banjara Hills, Hyderabad 500 034.
Tel No :( +91-040) 44618553, 67406035
Monday, December 29, 2014
Contact Details
Disclaimer: This presentation has been prepared to provide awareness & information purpose only. While every effort has been made to assure the accuracy of
the information contained herein, any affirmation of fact in this presentation material shall not create an express or implied warranty that any example or description
is correct. This material has been made available on the condition that errors or omissions shall not be made the basis for any claims, demands or cause of action. The
information provided, has been taken from sources believed to be reliable, but is not guaranteed by KSBL as to accuracy or completeness , and is intended for the
purposes of education and information only. The Rules and Regulations of the Exchange should be consulted as the authoritative source on all contract specifications
and regulations.
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