'Forex fluctuation must be managed'

A volatile rand has its trade advantages and disadvantages – depending on which side of the importing/ exporting fence the trade finds itself – but exposure to this instability needs to be actively managed and timing is crucial. So says Paul Margarites, managing director of Pangaea Fx, a newly established locally managed and owned financial service provider. Margarites told FTW that a lot of money could be saved by timing what he terms the “point of execution” with regard to the movement of finance, both inwardly and outwardly. “Importers and exporters need to take a conscious decision to ensure their exposure to the rand’s volatility is properly managed by an expert in global trading,” he comments. “At Pangaea Fx the level of the rand against other currencies is our primary concern and we watch the fluctuations minute by minute. It is this vigilance, combined with our global financial trading experience, that allows us to make effective market timing calls,” Margarites says. He told FTW that the company’s attentiveness to currency variations and its strong partnerships with some of the major banks allowed it to source the most competitive foreign exchange rates. “We can arrange trade finance discussions with the right people at the right institution as part of the bespoke service that is tailor-made to our clients' businesses,” he said. South Africa’s wine industry shattered its previous export record last year thanks to the weak rand, with the local wine industry exporting 26% more in volume terms in 2013 than the previous high achieved in 2012. “Yet in South Africa’s pharmaceutical industry, some of the foreign-owned companies who rely largely on imports had to either pass major price increases on to the consumer or take the erosion of their margin on the chin due to the rand’s weakness,” said Margarites, adding that margins can be improved with foreign exchange insights provided by a trade financing expert. INSERT & CAPTION A lot of money can be saved by proper market timing. – Paul Margarites CAPTION Wine exports from South Africa had a record-breaking 2013, thanks to a weak rand.