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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



Karvy – Financial Services for Corporates & Individuals

Corporate Individuals



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



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



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



Areas of Impact

• Gross Revenues (Gross Rupee Revenue = ForeignCurrency Revenue x Current Exchange Rate)

• EBIT/PAT (Due to mismatch in currency of Revenues &currency 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



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



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



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



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.



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.



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



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



Awards and Recognition

Zee Business award for India’s

“Best Market Analyst” in the“commodity fundamentals”

Awarded by the Finance Minister

Shri Pranab Mukherjee



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

http://www.moneycontrol.com/

http://www.moneycontrol.com/



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



Rakesh : +919160777787/040-67406027

Email : [email protected]

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.

mailto:[email protected]

mailto:[email protected]