The crisis has forced exporters to move from speculation to insurance risk


The crisis has forced Russian companies to think about more active use of derivatives was told by several market participants. “The demand for products that allow to hedge their risks, from corporate clients is growing. Now companies have thought about it and are willing to buy derivatives,” — said on Thursday reporters the head of the Department of global markets Sberbank CIB Andrey Shemetov. He noted that he sees the demand for such services from the oil and metallurgical companies, which are the “model of conservatism”. “We are negotiating with very large customers, including state-owned companies,” — said Andrey Shemetov.

The active demand for hedging instruments is not only from exporters but also from the companies who purchase abroad of equipment or supplies and sell products in Russia, said the Deputy General Director IK “Aton” Pavel Sokolov. “To build the price policy, they are forced to hedge their risks,” — said the financier.

In the BCS also mark growth of demand for derivatives with corporate clients. “It is mainly large importers and exporters, financial Directors which is already the practice of hedging risks,” — said the head of derivatives, BCS Sergey Kosulnikov. According to him, the most popular products to reduce currency risks and risks of changes in commodity prices. In particular, demand began to use currency options. “At the beginning of the year due to strong volatility in the foreign exchange market this tool was too expensive, however, as stabilization of the ruble the demand is again increased,” he said.

Statistics of the Central Bank testifies to the growing interest in derivatives. Thus, in the first quarter of 2016, significantly increased the turnover-currency interest rate swaps (up to 128 billion rubles from an average of 33 billion rubles per month). However, as noted in the materials of the regulator, the essential part of transactions was made Russian non-financial companies with a number of major credit organizations-residents. Increased in January-March and activity in the segment of interest rate swaps that, in the opinion of the Central Bank, may indicate increased need of companies to hedge interest rate risk. In the second quarter of 2016, the regulator noted a slight decline in derivatives trading: the number of open transactions cross-currency interest rate swaps since the beginning of April to the end of June decreased from 920 to 870, and the volume of open positions on the most popular pair dollar/ruble fell from 1.9 to 1.86 trillion rubles. However, the decline in this segment of the OTC derivatives market due to the expiration of transactions with maturities from one year up to five years, according to the materials of the Central Bank.

As previously mentioned , in 2014, a number of Russian companies have suffered losses from operations with derivatives. These include Transneft, the net loss from operations with derivative financial instruments in 2014 exceeded 70 billion rubles. the Company bought put options and sold call options on the dollar, and the timing of their execution coincided with the sharp devaluation of the ruble. This combination is equivalent to a short position on the dollar, which open in order to capitalize on the fall of the asset.

Besides, “Transneft”, in order to reduce the cost of borrowing, bought in 2013 barrier derivative almost $2 billion from one of the state banks. In September-October 2014 barrier these instruments were restructured, after the company signed with the same Bank transaction interest rate swap: the barrier was raised. Such barriers are triggered when the value of the currency beyond a certain value.

Loss from operations with derivative financial instruments in 2014 suffered and “Rosneft”. Its net loss from such transactions amounted to 122 billion rubles, increasing by 30 times. All about calculations , by the end of 2014, ten of the top 30 largest companies in the amount reflected in the financial reports a loss of 317 billion RUB due to operations with derivatives.

Billions of dollars speculating in the currency market has raised questions from the Central Bank. In December 2014, the Director of the financial stability Department of the Bank of Russia Sergei Moiseyev said that the collapse of the ruble to blame big banks and corporations that somehow “managed” to enter into forward contracts and played against the ruble. When the price of oil, and with it the ruble came down, “we have witnessed how large corporations losses on OTC derivatives with a currency component began to reach the amount that tens of billions of rubles,” he said. And most of these losses were not due to hedge currency risks,” explained Moses at the end of June 2015. The company tried to reduce interest expense on ruble loans, converting them using derivatives in foreign currency loans, where the rate is lower.

In June 2016 the Bank of Russia has obliged large companies to report to the repository on OTC derivative transactions, including currency swaps. To report they will start from October 2016.

Logic companies buying derivatives has changed after the crisis, says Board member of “FC Opening” Konstantin Tserazov. “If in 2013, many companies used derivatives to earn in the Forex market, but now we see that clients are prepared to really hedge their risks. All understand that it is better to incur a small cost than to be uninsured from fluctuations in currency exchange rates or raw material prices,” says the investment banker.

In 2015, the market risk hedging for corporate customers, according to Tarasova, almost absent, because in a situation of shrinking liquidity of the company were not prepared to divert resources to buy derivatives. “Losses on hedging instruments are possible, but they must be covered by profit businesses that they insure, so in General the company’s losses is limited. Large cumulative losses talking about the wrong hedging or speculative transactions”, — says Sergey Kosulnikov. He noted that, among Russian companies were those who earned on transactions with derivatives: for example, the company “RussNeft” has earned in 2014 profit due to the purchase of forward contracts. “The practice of using oil futures at start of drilling rigs widely used in the United States. This allows the oil companies to sell oil at a pre-fixed price,” says the financier.

In Sberbank CIB say that they intend to engage in hedging with full risk coverage of interest rate derivatives. “Of course, the cost of products allowing to hedge risks 100%, much higher. The company will have to pay 0.5% and 2%, but after the last crisis the views of the companies in this product are gradually changing,” said Andrey Shemetov.

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