The Fund also uses enhanced income strategies by engaging in dividend capture trading; option overwriting; and realization of gains on the sale of securities, dividend growth, and
currency forwards.
One-year
currency forwards show pressure for depreciation of the riyal near its lowest since late 2015, while three-month Saudi interbank money rates have dropped to their lowest since March 2016 as the modest improvement in state finances has allowed the government to spend more freely.
The insurgency in Iraq has not hurt overall market confidence in the Gulf; investors still see no direct impact on the Gulf Cooperation Council, where
currency forwards and credit default swaps have not risen in response to Iraq.
There is always the opportunity to hedge exchange risk and/ or buy
currency forwards.
Now the spotlight in financial markets is focusing on the
currency forwards markets.
One-year Qatari riyal
currency forwards, which have been pushed up by the Syrian crisis, continued to climb on Tuesday, reaching 180.
This fuelled speculation in the
currency forwards market, which ultimately proved incorrect, that they might have to abandon their pegs.
The fund utilises
currency forwards with a directional bias in the “carry” component of the strategy.
The Fund also utilizes enhanced income strategies by engaging in dividend capture trading, option overwriting, and realization of gains on the sale of securities, dividend growth, and
currency forwards.
Three-month onshore
currency forwards traded at 56.
Finally, Section VI suggests for the way forward including possible measures to negate the shortcomings of the
currency forwards.
The unit's chief investment officer, Guy Williams, said that the company was using credit-default swaps and
currency forwards to protect against losses in euro-denominated securities.
