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TREASURY MANAGEMENT AND PRODUCTS

TREASURY MANAGEMENT AND PRODUCTS. The Participation Banks Association of Turkey 22/10/2011. Treasury Management. Managing the liquidity, market and operational risk Ability to meet current and future financial obligations Optimizing the cash resources Pricing of treasury products

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TREASURY MANAGEMENT AND PRODUCTS

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  1. TREASURY MANAGEMENT AND PRODUCTS The Participation Banks Association of Turkey 22/10/2011

  2. Treasury Management • Managing the liquidity, market and operational risk • Ability to meet current and future financialobligations • Optimizing the cash resources • Pricing of treasury products • Sales of the products

  3. Treasury Units

  4. FX Dealing • Dealers to manage the FX position • FX deals for hedging purposes • “Square position” strategy • No proprietary trading • Pricing to the customers, the branches and the institutions

  5. UnilateralWa’d (FX Forward) • A feature attached to a contract • Unilateral promise made by one party to another, binding on the party that makes the promise. • For example, an importer who has foreign exchange transaction exposure in terms of payment of imports in foreign currency upon delivery of goods might hedge the risk of appreciation of foreign currency by undertaking a promise to buy the foreign currency in the future that matches the real exposure to currency risk of import transaction upon delivery.

  6. UnilateralWa’d (FX Forward)

  7. Money Market & ALM

  8. Commodity Murabaha

  9. Alternative to Swaps

  10. Wakala • Wakala is an agency contract, which usually includes in its terms a fee for the expertise of the agent. • The deposit placing/investor  Muwakkil. • The agent  Wakeel • Wakeel notifies the expected profit to Muwakkil. Any profit exceeding the expected profit is retained by the Wakeel.

  11. Key Issues in Liquidity Management

  12. PRECIOUS METALS • Gold, silver and platinum spot transactions for hedging. • Arbitrage between the domestic and foreign markets.

  13. Gold Current Account Customers can buy/sell goldlike any other foreign currencies as they open an account.

  14. Domestic Price> Foreign Price Foreign Prices> Domestic Price Domestic Price> Foreign Price Price Domestic Price Foreign Price A B C Time Arbitrage To take advantage of price differences between Turkish and foreign markets.

  15. Gold Plus- ETF • GOLD PLUS is Turkey’s first interest free Exchange-Traded Fund in Gold • GOLD PLUS, started to be traded in the ISE on the 2nd of August, 2010.

  16. Gold Plus- ETF • Gold bars belonging to the fund are physically kept in vault of the Istanbul Gold Exchange (there is no storage cost). • Stock exchange investors can easily invest in gold. No requirement of being one of KT customers. • Investor can give the shares and take the gold from the fund (at a cost).

  17. Physical Gold Trading • KT, is Turkey’s most liquid institution in gold, being able to meet the physical gold demand of the market. • KT, has managed to be the top 3rd member in the Istanbul Gold Exchange with its volume of gold trades in 2010 and 2011. We are very closely competing with the top 2nd member. • KT’s trades at IAR are intensed only if remarkable price arbitrage available among markets. Link for bulletins: http://www.iab.gov.tr/bulletins.asp

  18. LBMA Associateship, a remarkable milestonefor Kuveyt Turk’s role in Bullion Banking Kuveyt Turk has been approved by the LBMA as one of its “Associates” this year.

  19. Bank Asya and Albaraka stock prices

  20. Enes KAYATreasury SupervisorFX and Money Market Thank you for giving me your valuable time…

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