Companies save 450 million pesos from exchange hedges

Mexican companies that contracted exchange hedges have had efficiencies of 449.9 million pesos during 2022, according to information from Banco Base.

Nicolás Eguiarte Corona, Exchange Director of Mexico City at Grupo Financiero Base, explained that there are two ways to acquire exchange hedges: through the Derivatives Market (MexDer) of the Mexican Stock Exchange, or in the over-the-counter market through from intermediaries such as Banco Base.

Carlos González, Director of Analysis at Monex Casa de Bolsa, explained that the companies on the Mexican Stock Exchange (BMV) that contract hedging are exporters or have operations abroad such as Bimbo, Gruma, producers of raw materials (such as mining Grupo México and Industrias Peñoles), among others.

The Monex executive said that the hedges help companies protect themselves from volatility in the exchange rate, so that they do not suffer a significant impact in the event that it shoots up.

Nicolás Eguiarte assured that both in Mexico and in other countries, companies increasingly choose to contract coverage in the over the counter market than in MexDer, since the former is more flexible in terms of amounts and terms.

Between January and September of this year, the trading volume of clients seeking to hedge risks at Banco Base grew 49%, while clients with active positions increased 32.5% compared to the same period last year.

New clients of derivative products grew 11.4%, according to data from the same financial group.

In a study published a few weeks ago, Banco Base assured that from January 2019 to September of this year, Mexican companies -public, private and even small and medium-sized- have had efficiencies of 3,110 million pesos thanks to exchange hedges.

The Banco Base analyst explained that the Mexican Derivatives Market in Mexico has a lot of growth potential, since few companies contract hedging. “Fear persists due to the 2008 crisis, in which companies like La Comer contracted coverage and performed poorly”

Dollar, the most traded contract

The Mexican Stock Exchange assured in its year-end report that during 2022 the most traded contract in the Mexican Derivatives Market was the future of the dollar, with an average daily amount of 323 million dollars (around 6.4 trillion pesos), 22% more than in 2021.

Eguiarte said that the efficiencies for companies that contract exchange hedges occur in all their operations. “For companies that import inputs, (efficiencies) occur in their cost of sales,” said the Banco Base analyst.

sebastian.diaz@eleconomista.mx