Hedging & foreign exchange exposure: Implications on the stock returns of Philippine companies with foreign activities

Added Title

Hedging and foreign exchange exposure

Date of Publication

2010

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Commerce Major in Management of Financial Institutions

Subject Categories

Finance and Financial Management

College

Ramon V. Del Rosario College of Business

Department/Unit

Financial Management

Thesis Adviser

Liberty S. Patiu

Defense Panel Chair

Robert Dan J. Roces

Defense Panel Member

Carlos Velayo
Ciara Althea Sapalaran

Abstract/Summary

This paper seeks to examine the extent of foreign exchange exposure of selected Philippine companies with foreign activities (COWFAs) covering the period 2003-2008. This is done by looking at the relationships between the rate of return of the companies' stock price and the rate of return of the trade weighted exchange rate index and market portfolio through an OLS regression. In order to examine further the extent to which Philippine COWFAs are exposed to the fluctuations in the exchange rate, a cross-sectional regression and a test for correlation was conducted using several proxies for the factors that affect the hedging decision of the firm. The proponents of this study have found out that only few Philippine COWFAs showed significant foreign exchange exposure and not all industries are exposed to foreign exchange fluctuations. Furthermore, the study reveals that not all of the proxies used affect the hedging decisions of the firm and its foreign exchange exposure.

Abstract Format

html

Language

English

Format

Print

Accession Number

TU17176

Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

157 leaves

Keywords

Hedging (Finance); Foreign exchange--Philippines

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