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Uitgelicht: Tobintaks
| 20-10-2016 | Lionel Pavey |
De tobintaks of financiële transactietaks (FTT) is een kleine belasting op valutatransacties, die in 1971 naar aanleiding van het de facto afschaffen van het systeem van Bretton Woods, door de Amerikaanse econoom en Nobelprijswinnaar James Tobin werd voorgesteld.
Welke financieel producten zijn belastbaar – valuta, obligaties, aandelen, derivaten? En wat is het doel van de Tobintaks – inkomst genereren of speculatieve handel verminderen? Denk hier aan flitshandel.
Waar gaan de opbrengsten naar toe? BIS onderzoek (2016) ziet een dagelijkse omzet voor valutatransacties van USD 5 biljoen. Meer dan 75% van deze handel is buiten de Europese Unie: Verenigd Koninkrijk, Verenigde Staten, Japan, Singapore en Hong Kong. Allemaal dus buiten beschouwing van de Tobintaks.
Met een belasting van 0.01% (omgerekend 1 pip op een valutatransactie) wordt een opbrengst gegenereerd van maximaal EUR 30 Miljard. De handel zal zich echter ook verplaatsen naar landen waar geen belasting is (weer Verenigd Koninkrijk in Europa) – dus nog minder opbrengst.
Ook zal er minder liquiditeit zijn in de markt waardoor het moeilijker wordt om een transactie te sluiten. Moet er een verschil zijn tussen een speculatieve transactie en een “hedging” transactie?
Er zijn, voorlopig, meer vragen dan antwoorden.
Lionel Pavey
Cash Management and Treasury Specialist – Flex Treasurer
Accountability foreign currency risks
| 19-10-2016 | Maarten Verheul |
Sometimes in financial statements, I read that the income statement was negatively impacted by exchange losses. This seems unnecessary to me.
At the conclusion of each and every purchase order sales in foreign currency is a currency forward contract entered to avoid foreign exchange risks. Apparently, often to run the risk in the hope of some extra foreign currency earnings. Well, I can be brief about that. Your business is to sell your product or your service. Or, as they also say, “Every man to you.”
So, whose responsibility is it, that foreign currency is covered with a foreign currency forward contract? I say this is the responsibility of the Treasury department. Treasury should report this, at least to the management. If management decides that it is not covered, it will be their responsibility.
I even think that the Treasury department should report every single time. It may be that management decides not to do the act, because the risk is limited, but the next time the risk may be much greater.
The best scenario is when the management wants to exclude all risks with foreign currency and treasury delegates to hedge all transactions, buying and selling foreign currency forward exchange contracts. Then, there never is a doubt about what needs to be done and you won’t lose time consulting with management or directors.
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FX volatility creates opportunities
The British pound has strongly decreased in value against other major currencies such as the US dollar and the euro. Such FX movements can negatively impact firms’ financial statements and destroy firm value. On the other hand, they can also create opportunities. I would like to demonstrate this on the basis of a real case of a European based industrial firm which has the euro as functional currency. We’ll discuss two scenarios.
First, some time ago the firm was negotiating a takeover of a British firm. In anticipation of the M&A transaction it purchased British pounds against euros. However, the deal was unexpectedly cancelled. As a result the firm had to sell the pounds again. Luckily, the pound had strengthened against the euro in the meantime and the firm ‘gained’ millions due to the failed acquisition. This could however easily have been a ‘loss’ in case of a weakening of the pound. The ‘no FX strategy’ was in the firm’s favour this time, but I wouldn’t bet on it.
If you are thinking about a takeover in the UK (or any other country where the local currency is under pressure) it is wise to consider multiple FX hedging strategies. For instance, using options for these type of transactions not only provides you with a way out if the acquisition is not closed as an option gives you the right but not the obligation to purchase the FX. Furthermore, when the payment is due it also gives you the opportunity to buy the currency at the option’s strike price or at the lower prevailing market rate if the case.
Second, a characteristic of this industrial firm is that it is very dominant in its core markets. Due to this position, the firm predominantly sells its products in euro, also to customers with a different home currency. While it may seem that there is no FX risk, this strategy has led to currency issues, for instance in the Russian market. Due to the weakening of the Russian rouble against the euro, the firm’s products have become more expensive up to a point where sales in Russia have nearly ceased to exist. Russian customers cannot afford to pay the euro prices and demand pricing in roubles or a discount on the euro price.
This is an example where a firm’s exchange rate policy influences its core business activities. A solution could be to move production to Russia, and possibly to produce for other regions as well, although this has consequences far beyond the FX issue which have to be taken into account.
Both examples show that FX volatility can create opportunities. FX risk management should support the core activities of a firm and not the other way around. But if creative FX management helps create firm value, why not benefit?
Victor Macrae
Owner of Macrae Finance