Révision des techniques de couvertures des risques FOREX et matières premières dans une société industrielle

Abstract

The objective of this project-thesis is to revise the hedging techniques of an industrial company, Circuit Foil Luxembourg, that are used by this company to hedge the Foreign Exchange Risk and the Commodity Price Risk. Throughout its daily life, the company must face these two risks. In order to avoid the possibility of making losses due to these risks, it is necessary for the company to use different hedging techniques.

To perform the revision of these hedging techniques, it is necessary to go through different steps. Firstly, I analyse the company in order to determine all the risks that it is facing and the methods that are used to hedge these risks. Secondly, I perform an analysis of the different financial instruments that can be used to hedge the risks and I determine the ones which correspond the best to the requirements of the company.

Thirdly, I devote the follow-up to the revision of the technique used to hedge the Foreign Exchange Risk. For that, I develop a theoretical model of a perfect hedge, which uses the hedging technique which I recommend to use at the second step. I also develop some basic principles, that has to be respected for the hedge. I also do an analysis of the functioning of the company, in order to compare the basic principles of a perfect hedge and how it is realised in the company. The purpose is to suggest various improvements, based on what has to be done and what is actually done, in order to enhance the hedge.

Finally, I provide a tool that can be used to calculate the hedges, that have to be done, as well as to track the hedges. This tool is the conclusion of the previous steps. Indeed, this tool is based on the theoretical model developed but this model is applied to the reality of the company and it considers the improvements suggested at the third step.