Holcim
The giant Swiss cement making company is the latest example of how failing to hedge or protect earnings from adverse exchange rate movements can hurt even the largest and most sophisticated international companies as well as those in the SME sector which operate on narrower profit margins. In Q2, Holcim saw a rise in sales which was entirely eclipsed by the strengthening Swiss Franc. With CHF strengthening against MXP, AUD and EUR without the negative effects of the strong CHF on the translation of Holcim’s overseas earnings profits would have been almost 10% higher.
EUR/USD 1.1587.
World Armies
In these days of drones, electronic warfare and increasingly sophisticated fighting from remote cross border locations, the size of an army is still relevant for differing reasons including for example to act as a population control mechanism as in the case of North Korea which at 1.28 million has the fourth largest army in the world and only 35,000 less than the USA. China has more than 2 million while Russia has 1.134 million to Ukraine’s 730,000. The smallest army in the world is, of course, the Pontifical Swiss Guard the military unit responsible for protecting the Pope and the Vatican City in Rome. Established in 1506 it comprises just 135 guards.
GBP/USD 1.3279.