23 September, Thursday
09.30-13.00
Crude Oil and Coal: Basics of price risk management
Facilitator – Konstantin Babourine, TradeCruiser
14:00-18:00
Metals: Basics of price risk management
Facilitator – Katri-Ann Malin, TradeCruiser
24 September 2010. Friday
9:15-10:45
Session 1: Overview of major commodity markets. Expert opinions and projections of price trends Overview of production and consumption in major commodity markets, investment flows, and commodity price indexes. Macroeconomic performance indicators and forecasts provided by senior analysts of leading Russian and International investment banks.
The key focus will be on coal, crude oil, natural gas, metals and agricultural products. The session will include 4 brief presentations. Priority will be given to representatives of the banks sponsoring the Forum (in 2009, these were VTB Capital, BNP Paribas, Morgan Stanley, Barclays Capital, and Fortis Bank Nederland).
Panel discussion with involvement of commodity and trading companies:
- Do we need to hedge? The current commodity markets and how it affects risk management concepts for producers, consumers and traders in commodities
- The global economy and how it shapes the market and price trends. Correlation between the equity, foreign exchange and commodity markets. Links between the physical and the stock markets
11:15-13:00
Session 2:
Price Risk Management in the CIS and Globally: Current Status and Development Trends
Panel discussion with contributions from representatives of exchanges, banks, physical traders and commodity purchasing managers:
- Commodity futures in the Russian and international markets. Sales of commodities on the exchange floor
- Selecting the right instruments. Who should use the various instruments available, and why?
- Advantages and disadvantages of the instruments traded on the exchange market and over-the-counter
- What do traders prefer? Swaps vs Futures
- What do corporations prefer? Swaps vs Spreads
- Have end consumers, such as filling stations, airlines, bakeries or automobile manufacturers, finally entered the exchange markets? What prevents consumers from hedging their price risks?
- Price transparency in the domestic market. Has the government achieved its goals?
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14.15-16:00
Session 3:
Practical aspects of setting up price risk management
Real life experience and case studies shared by the participants of the round table: hedging price risk in the coal, crude oil, natural gas, metals and agricultural products markets. Participants of the discussion will include risk managers, financial officers and traders from commodity companies:
- Important examples of practical risk management in commodity markets
- Hedging reserves, cargo in custody, and refining margin. Identifying the competitive price in tenders etc.
- Financial planning and operations of a company with a fixed budget in a volatile market
- Identifying and evaluating all potential risks of a producer, a trader, or a consumer of commodities
- Risk management process organisation for ‘dummies’. Where to start?
- Setting up a risk management system in a company. Experience sharing from participants
16.30-18:00
Session 4:
Hedging revenue in foreign currency. Practical accounting, taxation and legal regulation of hedging operations
A discussion on the perception and interpretation of laws and regulations with contributions from auditing and consulting companies, lawyers, banks, exchanges, traders, legislators and fiscal authorities. Current practical experience:
- What are the lessons of the ‘Ukrainian Hryvnia-2009’ and how much did it cost?
- Latent inflation risks and currency hedging. Important aspects of foreign currency regulations affecting hedging operations
- Legal regulation of derivative transactions. How do Russian companies trade with Western and Russian counterparties in exchange or over-the-counter markets?
- Derivatives in international and Russian accounting standards
- Taxation of derivative transactions
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