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Q & A With C-View Limited

Company Name:

C-View Limited

Contact Name:

Paul Chappell

Phone Number:

00 44 1707 391 000

Fax Number:

00 44 1707 395 888

E-Mail:

info@c-view.co.uk

Product Name:

Managed Accounts

Product Assets:

$10.02 mio

Total Assets Under Management:

$10.02 mio

Firm Inception Date:

September 1996

Number of Employees:

3

 


Return Information

Annual Performance

1996

1997

1998

1999

4.92

12.70

11.11

3.13

Does not include Interest Income


Statistics

Annualized Performance:

11.68%

Standard Deviation:

5.51

Sharpe Ratio:

1.21

Parker FX Index Rank as of June 1999:

7 out of 54

 


Questions


1. How and when did your firm begin?

The firm was established in September 1996. It is based around the view that whilst investors may be sometimes looking for very high returns in currency asset class they are rarely comfortable with the draw downs that came with the size of leverage and exposure required to determine the returns. We believe there is an investor appetite for returns from currency in the mid to high teens with smaller drawdowns.


2. Who are the principals of your firm? Please provide a brief background on each.


Mr Paul Chappell.

Mr Chappell, 46, has been involved in the currency markets since 1974. Originally employed as a Manager at Hambros Bank in London, he became involved initially in foreign exchange marketing and subsequently went into trading. In 1978, he joined Chemical Bank in London as a trader and then assumed responsibility for FX Spot Trading activities. He was later promoted and transferred to Frankfurt as Foreign Exchange Manager.

In 1985 he was hired by Bank of America in London to develop the London Foreign Exchange Trading operations and later was given the responsibility of Head of Foreign Exchange Trading for Europe, Middle East, and Africa. In 1994 he was given role of Global Product Manager for Foreign Exchange. In this position he coordinated the development, structure and customer service of 23 FX Trading operations in all the major global locations and was directly and indirectly responsible for a total of more the 450 FX operatives worldwide. He was also at the forefront of development of the Electronic Brokering System (“EBS”) in association with a number of other leading banks which today commands 45% of the total of all brokered interbank spot market FX deals.

In 1996 he established his own Investment Advisory business, C~View Limited, which is a Securities and Futures Association Registered Company. C~View acts as an investment advisor to both Currency funds and also to special purpose Managed accounts on behalf of major Financial Institutions and Institutional Investors. C~View also runs Currency Overlay Programmes alongside its other advisory business.


3. Please describe your best trade ever and when it occurred.

Early in 1997, a long Thai Bart outright forward position was taken, as the currency was stable. This was also while interest rates were relatively low. In order to provide protection, a USD call/ THB put well out-of-the-money was purchased to provide longstop protection to the position. As it became apparent that the THB was going to weaken, the initial outright cash position was liquidated and the option originally bought only for protection was run as an independent trade. This proved highly profitable both due to the spot depreciation of the THB and the rise in interest rates, so that the outright rate moved materially.


4. What was your most difficult period?

There had been a series of bouts of pressure upon the Greek Drachma, which the Greek authorities sought to combat with higher interest rates and by maintaining a hard Drachma policy even if it involved austerity and tight budgetary controls. They appeared to have been successful in this in that speculative pressure eased on the currency and interest rates declined. A long GRD position versus the DMK was undertaken at this time. However, the currency rapidly deteriorated and subsequently devalued- all in one day, without the usual period of high interest rates the generally point to this risk and allow liquidation of the position at a small loss.


5. What is your outlook about the direction of the JPY, USD and Euro for the remainder of the year.

We see the JPY strengthen as somewhat temporary as we are not convinced of the robustness of the Japanese economic recovery. Whilst the USD may deteriorate further as the economy slows down and asset markets flatten or decline. We see the main beneficiary from herein as being the EUR. Thus we expect the EUR to be 5 – 10% stronger by the end of the year, with the JPY remaining flat or weak against the USD.


6. What is your view on emerging market currencies?

As far as European emerging market currencies are concerned a number of them represents the same type of opportunities as the Mediterranean currencies did in the 1970’s and 1980’s as they move closer to EU membership and integration into the EURO. Latin American currencies will remain highly volatile with attention-focused predominately on Mexican, Argentinean and Brazilian liquidity. We scale our emerging markets based around the liquidity and volatility as part of an overall risk management process. We expect further recovery in a number of the Asian emerging markets based around the high levels of growth and execution terms of trades.


7. What types of instruments do you trade?

All currencies that have a spot and forward FX market and that are readily convertible together with currencies where a reasonable NDF market exists. Eventually we will trade all convertible currencies that do not require the purchase or sale of a debt instrument in order to acquire a currency exposure. Options are used as protection for cash positions. Write options on cash positions at take profit levels or to buy protection.


8. Is leverage used? If yes, maximum leverage amount? What is average leverage amount?

Maximum leverage is 4 times and the average is around 2 times.


9. What is the average length of time positions are held?

We overlay a medium portfolio position with short term trading. The average length of time a medium term position is held is 3 weeks. Where the average time for a short-term position is 1 day.


10. Average number of positions during the month.

45 – 50

Profit & Loss

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