Hoax hedges

Currency derivatives


Currency volatility in the third quarter of the year is causing problems for a range of corporates in Asia. But some parties have suffered substantial losses from so-called currency 'hedges' far larger than their underlying exposures. The most prominent case to date is that of Citic Pacific. The Hong Kong-listed conglomerate, says it is facing potential losses of nearly $2 billion - an amount equal to about a quarter of its net assets - when it issued a profit warning in mid-October related