Hedging your bets

by Faysal Badran August 1, 2005

written by Faysal Badran August 1, 2005

with many businesses across all sectors suffering from the fluctuation in the euro and watching their profitability erode, it is important to recap on hedging, the process via which businesses can lessen the impact of unexpected currency moves on their bottom line. Without delving into the complex types of hedging, simply put, here is how it works. Lebanese companies that engage in overseas trade, such as car and food importers, regularly face a problem that stems from importing products or services in a currency different than the base currency. Lebanese companies that import from countries using the euro face currency risks. The fluctuations in the euro can cause profit margins on the final items to fluctuate. If the company is hit with a sudden rise in the euro, it must absorb the change, and if it is unable to pass on the change to the consumer, it may end up

Faysal Badran

Faysal Badran is the head of NCB Capital, a Saudi-based wealth and asset management firm. He oversees the company’s regional and international equities, global fixed income, money market, and alternative investments. Before joining NCB Capital, Badran spent five years at its parent company, National Commercial Bank (NCB), working in the office of the chief financial officer and in the international sector division. He also contributed as a writer for Executive magazine in Lebanon. Badran holds a bachelor’s degree in economics from DePauw University in the U.S.

Hedging your bets

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