HEDGING CURRENCY RISK: RESTORING BALANCE WITH SHARIA VALUES
An overview of FX risks Currencies fluctuate based on various factors including (but not limited to) monetary policy, inflation, political environment and trade balances. Companies conducting business globally face foreign exchange (FX) risk in three forms: a) transcation exposure from individual deals in foreign currencies; b) translation exposure when converting foreign subsidiaries’ financial statements into […]
Bond Cum Warrants: Can it shift up to the high gear of Sharia compliance?
Conventional Bond These bonds are fundamentally loan contracts; it does not give the investor a share of ownership in the asset project or business. A bond with option rights is called a warrant bond. For a limited time, it confers the right to buy equity securities, such as shares, of the bond issuer at a predetermined price (exercise price). Once […]
