Last year,Hexaware reported a Rs 81-crore loss for the quarter ended December 2007 after the company took a hit of about Rs 103 crore on account of unauthorised forex derivative deals struck by a company official.
The $50 million hit L&T took due to hedging losses in a subsidiary may just be the tip of the iceberg.
Last month,Sundaram Multipaper,paper and stationary manufacturer,has sued ICICI Bank for its losses on forex derivative products,arguing that the bank sold wrong derivative product to them.
Even Sundaram Brake linings,part of tvs group,has dragged its bankers to courts alleging,their bankers have mis-sold derivative products.
Coimbatore based Rajshree Sugars and Chemicals has filed case against Axis bank in madras high court alleging that the forex derivative product sold to them by the bank did not take care of their needs,the currency involved and amount of losses is not yet known.
Losses by Indian companies as a result of their exposure to the foreign exchange derivatives market may hog the headlines for next few quarters since many of the currency swaps are likely to mature after March,says foreign exchange experts.
Almost all private banks—Yes Bank, ICICI Bank, HDFC Bank, Kotak Mahindra Bank— and even State Bank of India have sold these derivative structures, and can potentially be hit if companies do not pay.
The stock market may not be aware of the impending crisis and yet, banking stocks have come under selling pressure when everyone was hoping they would provide succour in a falling market.
Excerpts from Source:Times of india and Business Standard.
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5 comments :
Now who's gonna teach simple hedging to IT companies....It's real simple...hedge for any rise of Rupee over Rs 39 as simple as that! That will take care of their margins. Why do they get into speculation??
Genius Jaggu -- Happy holi.
We may have a short bull run till the expiry. It has been harami pattern and last closing it just became more potent.
Regards,
Cheema
Last two days the markets (Nifty) has been making a pattern called Harami. Harami is one of the many reversal patterns in Candlesticks. Had the harami ended with one day of rally only I would have ordinarily left it at that as it is not too powerful a signal – but the continuation for the second day may mean that a short term reversal is on the cards and that the markets may find some relief rally in the coming few days. Ofcourse as I mentioned a little while earlier, it is not a very powerful reversal pattern but i would lay my bets on the continuation of bullish run for next few days only.
Explanation: Bullish Harami
• Direction: Bullish
• Type: Reversal
• Reliability: Weak/Moderate
• First day is a long red candle continuing an established trend
• Day-two is a small candle whose range is within the first days body.
This first possible version of this formation is characterized by a long red day followed by a Doji Cross that falls within the body of the previous days candle. Up to this point the formation matches the bullish Doji Star (see chart above). The doji illustrates a light day of trading where the open and the close are at the same price. A day of uncertainty after a large bearish move suggests sellers may have lost control of the market. Candlestick analysts will watch for bullish moves in the following days.
• Bullish Harami Cross turns into Bullish Harami
Traditionally Harami patterns give stronger reversal signals than the Harami cross. Since Haramis reflect price opening and then closing higher (analysts will see an actual blue body), it connotes buyers are in even more control of the market than the Harami Cross, which is only able to form a indecisive Doji.
This formation is very similar to the Bullish Engulfing formation, except that the move does not trade above the real candles body. Because Harami buyers are not able to rally price much past the previous days midpoint, this patterns offers a weaker signal.
In range bound markets this formation will occur frequently with little significance. But if this pattern occurs after a protracted downtrend, analysts will attach greater importance to it.
thanks for info,cheemaji :)
i dont know much abt candlesticks,so i cant give any opinion abt them..
pls do update me abt candlestick formations in future also..
thanks in advance.
uma,
teach the software companies?..LOL
they hire Harvard-educated MBA's fellows who do investments and trading...if they do not understand wat the companies want,how we understand..ROFL....
Forex derivatives work different way than equities,since they are more complex and advanced. :)
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