Keeping track of risk

While corporates around the region have become increasingly sophisticated in their choice of risk management products, MTR Corporation’s Jimmy Lau believes that simplicity is best. Saima Farooqi reports

The Asian crisis of 1997/98 rammed home to the region’s corporates the importance of looking at risk on a portfolio-wide basis – matching assets and liabilities, achieving a balanced debt profile and hedgingany outstanding foreign currency exposure. Since then, some Asian companies haveturned to complex hedging strategies, with an eye to reducing the cost of fundingby embedding barrier options or, more recently, credit derivatives within swaptransactions. For Hong Kong’s Mass Transit Railway