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Argentex, a UK-listed specialist in managing overseas alternate danger, has turn out to be a casualty of market volatility sparked by US President Donald Trump’s commerce battle, with the corporate compelled to droop its shares after a rout within the greenback tore by forex markets.
The corporate, which trades on the UK’s junior inventory alternate Purpose, mentioned on Tuesday that it had suffered a “fast and vital influence on its near-term liquidity place” from margin calls on its forex by-product positions.
Argentex supplies forex hedging and alternate companies to a various set of purchasers, from large firms such because the FTSE 100 insurer Aviva to particular person sportspeople.
The corporate calls itself a “world knowledgeable in forex danger administration and different banking for companies and monetary establishments”. 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 dollar — extensively anticipated to strengthen — has slumped, amid a broader lack of religion in American belongings as traders give attention to the potential financial injury from Trump’s tariffs on the world’s largest financial 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 next investor roadshow, it had been hit by “vital volatility in overseas alternate charges, notably in relation to the fast devaluing of the US greenback in opposition to different main benchmark currencies”.
The corporate mentioned it had “taken numerous steps to protect money and improve the collateral obtained from its counterparties”, and was “contemplating numerous choices for the enterprise”.
It mentioned it had the assist of its “principal liquidity supplier” on find out how to strengthen its place, noting that it was prone to see continued stress on its books of FX forwards and choices, the varieties of derivatives utilized by traders to wager 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.
“Within the occasion that the volatility in forex markets worsens materially, then the corporate’s monetary liquidity place, if not strengthened within the close to time period, could be considerably stretched,” mentioned Argentex.
In its full-year outcomes, the corporate had flagged “enhancing buying and selling momentum” and mentioned that increased FX volatility “typically acts as a tailwind for Argentex revenues”.
A spokesperson declined to remark past the inventory alternate announcement.
