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Q&A With Allied Irish Capital Management

Company Information

Company Name:

Allied Irish Capital Management Ltd.


85 Pembroke Road, Ballsbridge, Dublin 4, Ireland

Contact Name:

Gerry Grimes, Managing Director

Phone number

353 1 668 8860

Fax number

353 1 668 8831


Product Name:

Foreign Exchange Program

Product Assests:

As at end of February 2002 – US$193m*

Total Assets Under Management:

As at end of February 2002 – US$470m*

Firm Inception Date:

November 1993

Number of Employees:


* Includes notional equity.

Return Information

Annual Performance

















** from June 95

*** to February 2002


Annualised Performance:


Standard Deviation:


Sharpe Ratio:


Parker FX Index Rank as of February 2002:

9 out of 44


What types of instruments do you trade (eg, spot, forward, options)?

The Foreign Exchange Program trades interbank foreign exchange, spot and forward.

What is the average length of time positions are held?

10 days.

What is the average number of positions taken during the month?

7 trades.

Is leverage used? If yes, maximum leverage amount? Average leverage amount?

Yes, leverage is used. Maximum leverage is 3 times the trading level (including notional equity). Average leverage is less than 1 times the trading level.

What is your outlook for the major currencies for the remainder of the year?

We are negative on the outlook for the US dollar and anticipate strength for the euro on all crosses in 2002. As ever in selecting currencies “the best of a bad lot” principle applies. In this context, the relatively boring European economic story should win out in 2002. The USD current account deficit needs to be financed and we believe that US assets do not offer the potential gains achieved during the ‘90s and that the dollar will suffer as a result.

As the year progresses sterling’s potential entry to the euro will be highlighted. We believe the issue will tend to drag on sterling through 2002.

The case against the yen is well established but any surprises in the Japanese authorities willingness to restructure the economy would have a positive effect on sentiment towards the yen.

In which currency pair do you see the best opportunities over the next six months?

We believe the Swiss franc will appreciate strongly against the US dollar through 2002.

What opportunities do you see in emerging markets?

We believe that EU enlargement will become a major issue during the year and that the Polish, Hungarian and Czech currencies are strongly underpinned by this and other issues.

Have FX trading portals made it easier to transact business, or have they had no effect on your business? Please explain.

FX trading portals are most useful from the standpoint of market efficiency and transparency. We prefer to deal direct with our counterparts as it assists in intelligence gathering on flow and positioning.

What is your biggest concern about the future of the FX market (eg, bank consolidation, liquidity, exchange rate risk, diminished personal relationships)?

Our greatest concern on FX is the degree of bank consolidation that has left short term direction of the market in fewer hands. The market seems to spend a greater amount of its time searching for stop levels and whilst liquidity has not changed significantly the breadth of the market has contracted a lot in recent years.

Profit & Loss

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