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INTERNATIONAL FINANCE - IVY4X Advisory Services

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					i.VY Risk Management Services

       FOREX Risk
       Management
    Risk Management
n Why Risk Management
n The Challenges

n Changes in Financial Markets

n Our Services

n About Us
     Why International Finance?
n   The decade of the 1990’s saw a steady
    depreciation of the INR
n   This was largely a conscious move by the
    RBI
n   But volatility was relatively low, with
    monthly difference of about 25 paise
n   The early part of the 2000-2010
    decade saw a rise in volatility but
    nothing great
     Why International Finance?
n   2008 onwards the rupee became widely
    traded as foreigners took a keen interest in
    India
n   Volatility grew to unprecedented levels
n   Rise in FII/FDI and a vibrant NDF market
    meant that the rupee became vulnerable to
    developments in the overseas markets
n   The rupee’s integration in the global market
    increased visibly
              Have a Look
Month      High    Low      Difference
1999       43.61   41.75        1.86
2000       47.06   43.28        3.78
2002       49.18   47.65        1.53
Oct 10     44.94   43.97        0.97
Nov 10     46.11   43.84        2.27
Dec 10     45.81   44.49        1.32
Mar 11     45.36   44.35        1.01
Jun 11     45.13   44.55        0.58
Aug 11     46.00   44.00        2.00
Sep 11     49.89   45.66        4.23
22/09/11   49.58   48.33        1.25
             The Challenges
n   How does one protect oneself in these
    volatile markets?
n   Competition has meant finer pricing
    leading to thinner margins
n   Can we afford to let exchange rate
    fluctuations eat into these small
    margins?
n   What is the best way forward in risk
    management?
          The New Challenges
n   Keep yourself informed of what’s
    happening globally and what impact it
    may have on your business
n   Understand changes in global
    environment and their impact on
    domestic business
n   Understand the impact of different
    types of changes on each other
    The New Challenges (Contd.)
n   Adapt local systems and strategies to
    global changes
n   React to failure speedily and change
    strategies to prevent and contain future
    losses
n   Develop strategies and responses to
    take advantage of new opportunities
    that a changed scenario presents
n   Act quickly
    Changes in Financial Markets
n   Market integration is the most visible
    change
n   The line between domestic and
    international is difficult to see
n   The growth of MNC’s has been a major
    contributor to the growth of markets
n   Banks have a presence in most locations
     Changes in Markets (Contd.)
n   Functional unification across
    geographical locations is getting popular
n   Movement of capital across boundaries
    has increased
n   The interdependence of economies and
    the over lapping of influencing factors
    has meant greater volume of trade
     Changes in Markets (Contd.)
n   Vibrant markets characterised by
    speed, volume and number of
    participants and driven by technology
n   Increasing awareness and competition
    means finer pricing
n   The pressure to make money has
    contributed to volumes, fine pricing and
    higher volatility
     Changes in Markets (Contd.)
n   With volatility, complexity of markets
    and increased risk comes the need for
    dynamic risk management
n   New financial instruments and the
    growth of derivatives has opened up new
    opportunities
     Changes in Markets (Contd.)
n   Liberalisation and deregulation of
    financial markets is a continuous
    process as is financial innovation
n   It is a dynamic market, one that is
    constantly evolving
n   Every day is a new market, a new
    situation, a new opportunity, in which
    you are only as good as your last deal
                Our Services
n   Provide information on exchange rates,
    financial markets, and news/events
n   Assist in planning a proper risk management
    strategy
n   Implementation of hedging activity
n   Guidance on the use of appropriate
    instruments
n   Entry, Exit and Stop Loss Levels
n   Cancellations and Re-bookings of contracts
               Our Services
n   Interaction on a regular basis through
    calls, SMS and reports
n   Provide training where required
n   Liaison with banks where necessary
n   Assist in setting up of Trading Facilities
n   Drawing up of a Risk Management Policy
             Think about it…
n   To quote what someone wrote in a
    leading business daily last week:
n   In two weeks to Sept 23, the USD index 
    rose 2.7%, EUR fell 2.9%, while the INR 
    lost 7% 
n   The rupee behaved as much like a 
    commodity as a currency, highlighting the 
    increasingly urgent need for the RBI to 
    further deregulate the FX market to 
    increase liquidity and depth
             Think about it…
n   Real lesson - is for the corporate sector 
n   The vast majority of companies persists 
    "in purely market-view based decision-
    making" 
n   This approach, while sometimes 
    successful, often leads to catastrophic 
    losses as decision-making can end up 
    paralysed when stop losses are hit
n   Welcome September 2011!!! 
              Think about it…
n   Where is the rupee going???
n   The world is not going to end - it never 
    does
n   Things will certainly be difficult, they won't 
    be as bad as the most analysts believe - it 
    never is 
n   If you are willing to not look at your 
    investment for two years, buy emerging 
    markets
n   In the near term, only a fool would make a 
          Survival of the Smartest
n   Always be pro-active
n   Stop trying for tops and bottoms
n   Be satisfied - Stop being greedy
n   Discipline os the key word
n   Discipline to:
    ü   accept that volatility is here to stay
    ü   accept that you cannot always be right
    ü   accept that you can be wrong
                 About Us….
n   Ms Beena Gandhi a Commerce Graduate
    majoring in Economics and Statistics
    ü   Vast experience in the field of Education
    ü   Presently associated with the Dholera Bhal
        Seva Samiti NGO
    ü   Assisting in the “Landmark” Education
        Project as Introduction Leader
n   Ms Gandhi will be responsible for overall
    administration and logistical support
                     About Us….
n   Mr. Yatin Patel a B Sc. Chemistry and School of
    Building Science & Technology, CEPT Graduate, he
    holds Diplomas in Corporate Communications,
    International Business and Finance Management
    ü   Over 2 decades as a Businessman with rich
        experience in varied fields such as printing, design,
        advertising, water management and construction
    ü   Presently Trustee at the Bal Prasoon Vidyalay
    ü   Exemplary contribution in Social Development,
        NGO and Education serving over a 1000 under-
        privileged children at Dholera Bhal Seva Samiti
    ü   He is a past President of Rotary Club Ahmedabad
n   Mr. Patel will be responsible for overall marketing
    of our services and client relationship
                   About Us….
n   Mr. Victor Saldanha is a Double Graduate
    majoring in Business Management and Law
    ü   Over 3 decades experience in India and Abroad
        with banks and corporate houses in the area of
        Risk Management
    ü   Exposure in most major currencies across major
        financial markets and products
    ü   Visiting faculty in several management institutes
        conducting the course on International Finance
    ü   Conducted several seminars and training programs
        for corporates in risk management
n   Mr. Saldanha will be responsible for overall
    advisory services and training/seminars
          Our Motto…..
n Risk is an Integral part of Modern-day 
  Business
n Volatility is here to stay

n We will not be over-awed or scared 

n We will manage risk pro-actively

n We will  endeavor to convert risk and 
  volatility into opportunity
n   Have Risk…. Will 

				
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