Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Waning interest to hedge amongst exporters

Media release
ASB Kiwi Dollar Barometer

EMBARGOED UNTIL 0500 MONDAY JUNE 16 2014

Waning interest to hedge amongst exporters

Interest to hedge amongst exporters continues to decline
Just a small proportion of businesses use treasury policies to guide their hedging decisions
Small businesses more likely to base hedging decisions on the timing of cash-flows

The latest ASB Kiwi Dollar Barometer finds declining interest to hedge amongst exporters.

ASB Chief Economist Nick Tuffley says the proportion of exporters intending to hedge has dropped markedly over the last year.

“It’s likely the depreciation in the NZD in the lead-up to the survey discouraged exporters from hedging,” Mr Tuffley says.

When it comes to importing businesses however, the Barometer reveals a different story, with the proportion of importers intending to hedge continuing to edge up in the latest quarter.

While fewer exporters intend to hedge relative to importers, those exporters that do hedge do so across a greater proportion of their foreign exchange (FX) exposure.

The Barometer also reveals low use of treasury policies amongst businesses, with no small businesses surveyed having a treasury policy to guide FX hedging decisions. The majority of small businesses based their hedging decisions on the timing of cash-flows.

“These results suggest there is scope for small businesses to make greater use of external advice and to put in place guidelines for their hedging decision-making process in order to better manage their FX risks,” Mr Tuffley says.

ENDS


Note to editors

The ASB Kiwi Dollar Barometer tracks exporters’ and importers’ exposures to foreign exchange risk, through surveying businesses with annual turnover of at least NZ$1 million.

The Barometer also surveys businesses’ expectations for the NZD/USD and hedging plans for managing foreign exchange risk.

Hedging involves reducing the risk of adverse currency movements to a business by using instruments such as FX forwards. These instruments can protect exporters from an appreciation in the NZD, and importers from a depreciation in the NZD.

For the June 2014 edition of the ASB Kiwi Dollar Barometer, East & Partners interviewed 399 businesses turning over at least NZ$1 million per year. The interviews were conducted between April 28 and May 9 2014. Businesses were asked a range of questions about their exposure to and views about the NZD.


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news