Greenback rout forces UK foreign money threat specialist to droop shares

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Argentex, a UK-listed specialist in managing international alternate threat, has grow to be a casualty of market volatility sparked by US President Donald Trump’s commerce struggle, with the corporate pressured to droop its shares after a rout within the greenback tore by means of foreign money markets.

The corporate, which trades on the UK’s junior inventory alternate Intention, mentioned on Tuesday that it had suffered a “rapid and significant impact on its near-term liquidity position” from margin calls on its foreign money by-product positions.

Argentex offers foreign money hedging and alternate providers to a various set of shoppers, from large corporations such because the FTSE 100 insurer Aviva to particular person sportspeople. 

The corporate calls itself a “global expert in currency risk management and alternative banking for businesses and financial institutions”. Its shares have risen 50 per cent this yr as exercise surged within the FX market, giving it a market worth of simply over £50mn. 

This yr has seen a dramatic reversal in currencies: the US greenback — broadly anticipated to strengthen — has slumped, amid a broader lack of religion in American belongings as buyers deal with the potential financial harm from Trump’s tariffs on the world’s greatest economic system.

The greenback is now down greater than 9 per cent in opposition to a basket of its buying and selling companions, whereas the euro — a main beneficiary of the buck’s decline — is up greater than 10 per cent. 

Argentex mentioned that since its full-year outcomes on April 2, and the following investor roadshow, it had been hit by “significant volatility in foreign exchange rates, particularly in relation to the rapid devaluing of the US dollar against other major benchmark currencies”.

The corporate mentioned it had “taken a number of steps to preserve cash and increase the collateral received from its counterparties”, and was “considering a number of options for the business”. 

It mentioned it had the help of its “principal liquidity provider” on methods to strengthen its place, noting that it was prone to see continued strain on its books of FX forwards and choices, the varieties of derivatives utilized by buyers to guess on or hedge actions in alternate charges.

The corporate was based in 2012 and counts Pacific Investments, established by veteran financier Sir John Beckwith, as its largest shareholder.

“In the event that the volatility in currency markets worsens materially, then the company’s financial liquidity position, if not strengthened in the near term, would be significantly stretched,” mentioned Argentex.

In its full-year outcomes, the corporate had flagged “improving trading momentum” and mentioned that larger FX volatility “generally acts as a tailwind for Argentex revenues”.

A spokesperson declined to remark past the inventory alternate announcement.