Looking at the opinion of Wong from Areca Capital, which forex exposures would be most relevant for the equipment-heavy companies and why? Explain the 3 (three) different ways these companies can hedge the forex exposure? Provide your recommendation on how these companies shall manage the relevant forex exposure identified earlier. $477BFW2341 International financial management2:05:18services quoted in US dollar such as glovemakers, electrical and electronics (E&E) players,petrochemical, commodities and furniture producers, would benefit from higher revenues and bettermargins as their products become more competitive with a "cheaper" ringgit.Similarly, Hong Leong Investment Bank Research (HLIB) head of retail research Ng Jun Sheng also saidthat investors should look at semiconductor companies, electronics manufacturing services (EMS)providers, electrical & electronics (E&E) players, wooden furniture manufacturers and plastic packagingcompanies. However, he pointed out that the weak ringgit could cancel out the potential positives forexporters, as raw material prices have also increased. "[The weak ringgit] may not really benefitexporters because the raw material prices which have gotten very expensive have driven up input costs.[The exporters] might not benefit as much compared to the previous inflation cycle around 2015/2016."The inflation is a lot more serious this time around. Even though the selling price is high, the inputprices are even higher. On a net-net basis, the question would be whether selling prices would prevailover the higher input costs," Ng said. Meanwhile, those that do not stand to benefit from a weaker ringgitinclude companies in the automotive, consumer and construction sectors, he added.Another analyst that declined to be named said companies in the construction, property and consumersectors could see some margin compression amid the higher input costs and supply chain disruption."The supply chain disruption is a different topic which affects their revenue recognition. However, purelyon forex alone, the impact should be net positive, but we think that the ringgit will strengthen by the endof 2022, so any tabulations [for winners and losers] is premature given the ringgit's volatility currently,"the analyst said.000000F4Meanwhile, Areca Capital's Wong said investors should watch out for companies with US dollar-denominated borrowings such as equipment-heavy companies, which would need to pay more toservice their debt. "However, cash-rich companies with foreign assets/cash would have better valuationgains, especially those companies with foreign subsidiaries in the US and Singapore. Companies whoseinvestment portfolios have overseas exposure such as banks will also have better returns when'marked-to-market," Wong highlighted. Nonetheless, Wong believes that the weakening of the ringgit andthe weakness in Malaysian equities and fixed income markets may attract some foreign fund flow.Based on the news article above, answer the following questions.7%5इF5

Question

Looking at the opinion of Wong from Areca Capital, which forex exposures would be most relevant for the equipment-heavy companies and why? Explain the 3 (three) different ways these companies can hedge the forex exposure? Provide your recommendation on how these companies shall manage the relevant forex exposure identified earlier. $477BFW2341 International financial management2:05:18services quoted in US dollar such as glovemakers, electrical and electronics (E&E) players,petrochemical, commodities and furniture producers, would benefit from higher revenues and bettermargins as their products become more competitive with a &#34;cheaper&#34; ringgit.Similarly, Hong Leong Investment Bank Research (HLIB) head of retail research Ng Jun Sheng also saidthat investors should look at semiconductor companies, electronics manufacturing services (EMS)providers, electrical & electronics (E&E) players, wooden furniture manufacturers and plastic packagingcompanies. However, he pointed out that the weak ringgit could cancel out the potential positives forexporters, as raw material prices have also increased. &#34;[The weak ringgit] may not really benefitexporters because the raw material prices which have gotten very expensive have driven up input costs.[The exporters] might not benefit as much compared to the previous inflation cycle around 2015/2016.&#34;The inflation is a lot more serious this time around. Even though the selling price is high, the inputprices are even higher. On a net-net basis, the question would be whether selling prices would prevailover the higher input costs,&#34; Ng said. Meanwhile, those that do not stand to benefit from a weaker ringgitinclude companies in the automotive, consumer and construction sectors, he added.Another analyst that declined to be named said companies in the construction, property and consumersectors could see some margin compression amid the higher input costs and supply chain disruption.&#34;The supply chain disruption is a different topic which affects their revenue recognition. However, purelyon forex alone, the impact should be net positive, but we think that the ringgit will strengthen by the endof 2022, so any tabulations [for winners and losers] is premature given the ringgit's volatility currently,&#34;the analyst said.000000F4Meanwhile, Areca Capital's Wong said investors should watch out for companies with US dollar-denominated borrowings such as equipment-heavy companies, which would need to pay more toservice their debt. &#34;However, cash-rich companies with foreign assets/cash would have better valuationgains, especially those companies with foreign subsidiaries in the US and Singapore. Companies whoseinvestment portfolios have overseas exposure such as banks will also have better returns when'marked-to-market,&#34; Wong highlighted. Nonetheless, Wong believes that the weakening of the ringgit andthe weakness in Malaysian equities and fixed income markets may attract some foreign fund flow.Based on the news article above, answer the following questions.7%5इF5<^A6MacBook AirXF6El&7F7€*CODIFB(9AS*J4F10F # 1 3 14F1112:04{+ 11Jeeho McGF12 000000F4BFW2341 International financial managementWeak ringgit a boon for exporters but higher raw material prices could negate positivesBy Seah Eu Hen, edited by Ahmad Naqib Idris - theedgemarkets.comApril 28, 2022 08:00 am +08KUALA LUMPUR (April 28): While exporters are usually touted as the clear winners of a weak Malaysianringgit, it is not as clear-cut this time around as companies also experience a rise in raw material prices,amid the recent chain of unprecedented events. Despite the recent rally in crude palm oil (CPO) futuresand Brent crude oil prices to near-record highs which would usually be positive for a net commodityexporter like Malaysia - the ringgit cracked under pressure against the US dollar and the Singaporedollar.The ringgit hit 4.32 against the greenback - its weakest level since May 2020- last Friday (April 22),and depreciated to a record low of 3.1766 against the Singapore dollar on Tuesday (April 26) amid thehawkish sentiment ahead of the US Federal Reserve's (Fed) Federal Open Market Committee (FOMC)meeting and the economic slowdown in China. At the time of writing, the ringgit traded at 4.3585against the US dollar and 3.1621 against the Singapore dollar.Although a weak currency could be a boon for exporters and bane for importers, market observers saidthat the current situation exacerbated by unprecedented events such as the Covid-19 pandemic andglobal supply chain disruption will not be the same as the aftermath of previous inflation cycles.Areca Capital Sdn Bhd chief executive officer (CEO) Danny Wong said that exporters with products orservices quoted in US dollar such as glovemakers, electrical and electronics (E&E) players,petrochemical, commodities and furniture producers, would benefit from higher revenues and bettermargins as their products become more competitive with a &#34;cheaper&#34; ringgit.Similarly, Hong Leong Investment Bank Research (HLIB) head of retail research Ng Jun Sheng also saidthat investors should look at semiconductor companies, electronics manufacturing services (EMS)providers, electrical & electronics (E&E) players, wooden furniture manufacturers and plastic packagingcompanies. However, he pointed out that the weak ringgit could cancel out the potential positives forexporters, as raw material prices have also increased. &#34;[The weak ringgit] may not really benefitexporters because the raw material prices which have gotten very expensive have driven up input costs.%F5AMacBook Air2:05:26F6&F7FOF94F10-a FF11Jeeho N12:04+

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Forex transactions:
Companies engaged in international trade are exposed to changes in the…