Evaluating Transaction Exposures and Hedging Solutions for Importing Steel at Construction and Materials Trading Joint Stock Company.

15154 Words Sep 22nd, 2013 61 Pages
[Tang Huynh Yen Phuong]

2011

PREFACE In the nature of international trade, many companies are exposed to the risk of exchange rate fluctuation. The purchases from international suppliers in other countries, and sales to domestic buyers with account payables and account receivables in different currencies will give rise to foreign exchange risks. 1. General problem statement In an effort to meet the demand of the Vietnamese building materials market, Construction and Materials Trading Company is involved greatly in the international trade. Profit from materials trading makes up approximately 75 percent of CNT‟s total profit. In CNT company, the imports of Steel such as Steel Beams, Steel Plate, Steel Sheet... often create account
…show more content…
Literature study- to deepen knowledge about foreign exchange risk, and the overview of the Vietnamese foreign exchange market. Collecting data- From the reported data provided by the company, specialized reference books, information from newspapers, magazines, internet, and some research related to the topic. Processing the data- through these methods. Statistics by tables, charts, formula: statistics to find out common characteristics of analyzed factors. Comparison methods: compare the same kind of numbers to find the increasing and decreasing in each year. Methods of Experts: consult the experts.

5. The organization of the thesis The thesis would be divided into three chapters which consist of: CHAPTER 1: LITERATURE REVIEW This chapter explains theories behind the analysis done in this thesis, the overview of the foreign exchange market, and the derivatives market in Vietnam. CHAPTER 2: RISK ANALYSIS OF TRANSACTION EXPOSURE This chapter gives a brief overview regarding the company, detailed analysis of the transaction exposure in the last five years as well as the current hedging tool of the company. CHAPTER 3 DESIGNING HEDGING STRATEGY This chapter includes some available hedging tools, and long-term hedging strategy for the company and recommendations for the State Bank of Vietnam to manage the derivatives market.

3

[Tang Huynh Yen Phuong]

2011

CHAPTER 1- LITERATURE REVIEW 1.1. Import 1.1.1. Definition of
Open Document