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Wouldn't every company that could afford a part-time CFO be hedging currency exposure?
by rfrey 10y ago
Wouldn't every company that could afford a part-time CFO be hedging currency exposure?
- vidarh 10y agoA lot of the FTSE-250 companies seeing dropping share prices are companies that are based in the UK, and making most of their income in the UK. While some of them probably could (and some I'm sure have) hedge against increased prices from foreign suppliers, for most of the the big problem is expected problems with domestic demand. Some certainly faces currency risks too, but then the question is how much are you willing to spend to hedge? It's highly unlikely most companies have sufficient earnings that they could have afforded to hedge against movements of this magnitude for anything but a short period. Certainly they can - and I'm sure some have - reduce the impact and give themselves time to adapt, but the cost of hedging against the effects of movements of this size and effects potentially lasting years would be prohibitive for almost anyone.