Choose TWO Hong Kong publicly listed companies which have currency exposure.

Use no more than two pages to 1) Describe the sources and the types of currency exposure, and 2) the hedging technique involved. 3) the impact on the companies earning if information is available. You should also include:

-Brief descriptions of the main business

-Stock code

You may use advanced search using the link below to get annual reports of HK listed companies

http://www.hkexnews.hk/listedco/listconews/advancedsearch/search_active_main.aspx

Outcomes: learn/understand the currency exposure of real companies are facing, and how they hedge their exposures in practice.

Example:

BOC Aviation Limited (2588) [Note: this firm cannot be used in your assignment]

Main Business:

Sources of currency exposure: .

Types of currency exposure:

Hedging methods: .

Impact: Not critical or approximate % of earning/revenue if applicable, etc.

From its 2017 annual report, page A97, you can find the companies main business together with the details of currency exposures, the hedging methods, and the impact:

The Group has transactional currency exposures mainly arising from its borrowings that are

denominated in a currency other than the functional currency of the Group.

All loans and borrowings which are denominated in Australian Dollar, Chinese Yuan, Hong Kong Dollar and Singapore Dollar are swapped into United States Dollar. Foreign currency exposure arises when the Group collects United States Dollar rentals to repay the Australian Dollar, Chinese Yuan, Hong Kong Dollar and Singapore Dollar borrowings. The Group primarily utilises cross- currency interest rate swap contracts to hedge its Australian Dollar, Chinese Yuan, Hong Kong Dollar and Singapore Dollar denominated financial liabilities.

Accordingly, a movement in foreign currency exchange rate is not expected to have a material impact on the Groups financial statements

Use your own words to describe 1) the sources and the types of currency exposure, and 2) the hedging technique involved (i.e. how the firm hedge its currency exposure) and 3) the impact (your estimation or mentioned in the report, you need not to prove your estimation). You will get full marks if you fulfill the tasks mentioned above.