Barclays launches Currency Overlay for company hedging

Barclays Capital has launched what it claims is the Gulf's only bank-managed corporate currency and hedging product, called Currency Overlay.

The product, launched in the UK last year, has £350 million under management, and is aimed at providing Gulf-based corporations with dedicated currency risk management, Director Andrew Winterton said.

"The product covers both small treasuries and major portfolios and is aimed at shielding clients from currency fluctuations," he said. "In particular, it provides importers with a hedging platform to weather currency downturns leaving them to focus on their core businesses."

With the Gulf daily accounting for multi-million transactions in the high-risk euro and yen, it is now paramount for regional corporations to achieve the best currency exchange rate possible. The normal hedge is pre-agreed and clients only pay out on performance improvements compared to the baseline. No charges are made on non-performing hedge strategies.

Assessment of currency trends, analysis of project performance and advice on long-term currency-based investments are core elements of Currency Overlay. According to Winterton these enable clients to both control and reduce risks.

"We will serve clients from Dubai and London to ensure their portfolios are monitored locally while at the same time enabling them to benefit from Barclays' geographic spread, real-time market knowledge and good execution," he added.

The bank's team in charge of the product claims a 4.5 per annum improvement on exposures presently under management.