Asia's stock answer

Many say that equity exposures should remain unhedged. But, as HSBC’s Tarun Kataria argues, the decline in the value of Asia’s currencies post-crisis suggests that hedging equity is crucial to secure returns

One of the many indelible imprints from my MBA programme in the 1980s is the discussion regarding equity hedging. We were told, “never hedge equity” as, for the most part, it is long-term and eventually balances out over time. Over the years, numerous corporate treasurers throughout the world have echoed this view. Nevertheless, the devastation of Asia’s currencies during the financial crisis in 1997/98, made it blatantly apparent that leaving US dollar equity unhedged did not make