Off late BSE been tracing globals. dow rises BSE rises.China falls BSE falls.
for a change let`s write BSE first. @ 15922 .........watch for 17724
on a technical inverse Head n shoulder pattern (with gap yet unfilled)
dow @ 9544 .with breach of 9656 and support of 9014 watch for 10800
(hope it does not a boomerang to 8k !!)
INR :- importers to get some respite. - only "some" respite.
What`s the scene on ground: -We regularly talk to people , no one seems to agree that their exports to europe or US have picked up . Domestically famine has taken a firmer grip. Thanks to India, Global sugar producers are riding on 28 -1/2 year sugar high. Even the tur dal chaps are happy. The statisticians are happy with -ve WPI, the goldsmiths would be happy at just below 15k / gram , gold miners are happy at 950 $/oz. , The arabs are happy above $70 / bl ,
-- The remaining may get a chance to get happy looking at sensex.
It remains to be seen who get`s unhappier first-- If you don`t want to be the first one, use the forex moves over next few days to freeze your margins in business -- so that you can stay happy for a prolonged period !!
28 August, 2009
27 August, 2009
watch out..........
There are two principles of financial risk management.
1. protect your back
2. Always Remember 1
There are always entities who forget pt 2 and there are entities who are unable to judge the size of the back and hence cannot protect their back. Earlier markets used to have phases of lull and volatility. We recollect one such lull in 2007 when euro was stuck in a mere 300 pt.range for full three months. Just to make a contrast, in 2001 we were at the desk holding the line for a copper quote on LME. 1767 / 1790 .... the trader added, Its an indicative only (13$ spread and that too indicative) its like borrowing at L+ 1000 bp in Oct `08 which too was at one time indicative.
Copper rose incidentally from 2001 to 2009 .It saw 8000$/t . The rumour is that cost of olympic stadium has increased with rise in copper and other metals. Well the guv is there to bail them out. But what about others ? for others self help is the best help.
There is again a common fally. The moment a contract is signed the exposure begins. Yes it does, but it may not be in a format compatible to implement a meaningful hedge plan. Put in other words, the effectiveness of the hedge plan may not be noticeable in immediate financial year.An exposure which is getting rolled over every six months for as good as three years is not an exposure.Its like sanctioning a blueprint of a project whose construction may start 3 years hence. The project cost today is 100 crores with Rs. 50 crore of forex element in form of imported machinery whose delivery schdule is not yet fixed. The whole board will make a fuss out of it but none would have a solution.
Then there are always common problems which assume the shape of critical mass -- all thanks to the extraordinary volatility of yester years which are these days appearing as daily/weekly movements. What should be the yardstick to base decisions on, what should be the instruments to be used to cover the back and more important what is the size of the back ? .........So finally the SME promoter runs to an expert who willingly runs the treasury operation as an BPO. -- But tell us -- is your operation really so big OR your understanding about markets so small ?
Talk to us. we believe in empowering you & your staff to understand "backs", what can hit them and how to protect them . -------Ater which , we step back !!
1. protect your back
2. Always Remember 1
There are always entities who forget pt 2 and there are entities who are unable to judge the size of the back and hence cannot protect their back. Earlier markets used to have phases of lull and volatility. We recollect one such lull in 2007 when euro was stuck in a mere 300 pt.range for full three months. Just to make a contrast, in 2001 we were at the desk holding the line for a copper quote on LME. 1767 / 1790 .... the trader added, Its an indicative only (13$ spread and that too indicative) its like borrowing at L+ 1000 bp in Oct `08 which too was at one time indicative.
Copper rose incidentally from 2001 to 2009 .It saw 8000$/t . The rumour is that cost of olympic stadium has increased with rise in copper and other metals. Well the guv is there to bail them out. But what about others ? for others self help is the best help.
There is again a common fally. The moment a contract is signed the exposure begins. Yes it does, but it may not be in a format compatible to implement a meaningful hedge plan. Put in other words, the effectiveness of the hedge plan may not be noticeable in immediate financial year.An exposure which is getting rolled over every six months for as good as three years is not an exposure.Its like sanctioning a blueprint of a project whose construction may start 3 years hence. The project cost today is 100 crores with Rs. 50 crore of forex element in form of imported machinery whose delivery schdule is not yet fixed. The whole board will make a fuss out of it but none would have a solution.
Then there are always common problems which assume the shape of critical mass -- all thanks to the extraordinary volatility of yester years which are these days appearing as daily/weekly movements. What should be the yardstick to base decisions on, what should be the instruments to be used to cover the back and more important what is the size of the back ? .........So finally the SME promoter runs to an expert who willingly runs the treasury operation as an BPO. -- But tell us -- is your operation really so big OR your understanding about markets so small ?
Talk to us. we believe in empowering you & your staff to understand "backs", what can hit them and how to protect them . -------Ater which , we step back !!