WASHINGTON (MarketWatch) -- The fiscal troubles sweeping the capitals of the euro zone are unrelated to the 17-member currency, Joe Kaeser, chief financial officer of German industrial company Siemens AG (SI, SIE.XE), said in an interview with Dow Jones Newswires at The Wall Street Journal's CFO Network conference on Tuesday.
"We need to make sure we do not confuse the crisis of economies with a crisis of currency," he said. "The euro is fine. It's not in crisis."
Kaeser warned that European business would suffer if the union returned to the days of needing three separate currencies to drive 300 miles across three European countries.
"The euro is a very good thing and it's important that we keep it," he said. "It's good for the consumer and good for business."
Siemens, which has its home base in the euro zone, is mainly exposed to the dollar and the British pound.
The company hedges all currency risk in its infrastructure business, representing about two-thirds of revenue, Kaeser said.
Those exposures are hedged from the time the contract is put into place. For the rest of the business, which involves selling smaller-ticket items like industrial-automation machines, MRI scanners, and fire-safety systems, Siemens hedges about three-quarters of the foreign-exchange risk, using forwards and options on a rolling four-quarter basis.
Kaeser said he expects that the new derivatives regulations that will come into effect with the Dodd-Frank regulations will mean some slight cost increases for his hedging program.
But the greater transparency in the foreign-exchange market will be worth the cost, he said.
Siemens does not currently hedge the Chinese yuan but is watching closely to see what happens to the currency if the Chinese government allows it to float freely, Kaeser said.
Source: www.marketwatch.com
"We need to make sure we do not confuse the crisis of economies with a crisis of currency," he said. "The euro is fine. It's not in crisis."
Kaeser warned that European business would suffer if the union returned to the days of needing three separate currencies to drive 300 miles across three European countries.
"The euro is a very good thing and it's important that we keep it," he said. "It's good for the consumer and good for business."
Siemens, which has its home base in the euro zone, is mainly exposed to the dollar and the British pound.
The company hedges all currency risk in its infrastructure business, representing about two-thirds of revenue, Kaeser said.
Those exposures are hedged from the time the contract is put into place. For the rest of the business, which involves selling smaller-ticket items like industrial-automation machines, MRI scanners, and fire-safety systems, Siemens hedges about three-quarters of the foreign-exchange risk, using forwards and options on a rolling four-quarter basis.
Kaeser said he expects that the new derivatives regulations that will come into effect with the Dodd-Frank regulations will mean some slight cost increases for his hedging program.
But the greater transparency in the foreign-exchange market will be worth the cost, he said.
Siemens does not currently hedge the Chinese yuan but is watching closely to see what happens to the currency if the Chinese government allows it to float freely, Kaeser said.
Source: www.marketwatch.com
No comments:
Post a Comment