The first recommendation is always to try to reduce the risk to which you are exposed, in this case the official devaluation. Faced with a highly volatile and uncertain scenario, going unhedged is not an option. Within the Capital Market there are different instruments that allow to mitigate the foreign exchange risk indirectly, for example: dollar-linked bonds, negotiable obligations and Common Investment Funds (FCI). However, the most suitable tool is the dollar futures.
The dollar futures They allow the position to be leveraged, since to buy 1 dollar contract (equivalent to 1,000 dollars) approximately 20% of said position is needed to deliver as collateral. Namely, To hedge against an official devaluation, it is not necessary to disburse the entire position, but only 20%.
Currently August futures are around $141.6 and the one corresponding to September in $151.9, with implicit nominal rates of 84.5% and 89.4%. Each position expires on the last business day of each month and its adjustment is made against the Reference Exchange Rate Communication “A” 3500 (Wholesaler), today in $129.6.
Another question that companies pose in the face of these restrictions is what to do with the available pesos, since they cannot turn them abroad. Then, once the hedging operation has been made, the construction of the portfolio is another matter. The only instruments with a rate in pesos close to those implicit in Rofex are the LEDES or LECER, with yields of approximately 60% TNA.
Understanding that these securities incorporate another risk, which is exposure to the public sector, it is suggested to distribute the available capital as follows:
- 25% in LEDES of the same maturity as the Rofex position;
- 25% in fixed terms at 50% TNA;
- Remaining 50% distributed in guarantees and FCI Money Market or T+0 risk-free, with an average yield of 39/40%
Once the strategy is assembled, if the accumulated official devaluation for the year is projected at around 47% and is compared with the levels of the implicit rates of the Rofex futures market and the yield of the portfolio suggested for this purpose, even so would obtain a positive difference close to 1% or 2% as a total result of the operation.
It is important to highlight that coverage should not be analyzed in terms of profit or loss, but rather as the decision to minimize the risk to which one is exposed. By way of illustration, it would be like paying for car insurance every month: If the owner does not have an accident, he will not regret having paid. The futures hedging strategy works the same way.
Therefore, to gain certainty in a context of uncertainty, both in prices of the aforementioned variables and in regulations on some operations, it is advisable to use some of the hedging strategies offered by the Capital Market.
Source: Ambito
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