Valtech’s Financial Instruments Valuation

Valtech provides professional valuation of financial instruments to support financial reporting in relation to recognition and measurement, impairment, derecognition and general hedge accounting financial instruments.

Scope of Derivatives Valuation of Valtech

  • Share options
  • Convertible bonds
  • Commodity / Currency (FX) / Interest rate swaps
  • Convertible preference shares
  • Warrants
  • Futures / Forward contracts
  • Call / Put options
  • Financial guarantees
  • Structured deposit contracts
  • Accumulators / Decumulators
  • Equity-linked Instruments
  • Structured Products
  • Insurance Related Product (LSP / KeyPerson Insurance)
  • Fund Valuation (especially involving different layers of interest)
  • Real Options
  • Hedging Accounting
  • Incremental Borrowing Rate

Structured Credit Analysis

Credit analysis by making reference to the framework, methodology and also empirical studies from S&P and Moody’s. Credit analysis is usually performed in estimating credit spreads and incremental borrowing rates.

Valuation of Derivatives

Derivatives are widely used by listed companies for hedging and investment purpose (usually as a result of gaining protection while maintaining upside potential). On liability side, derivatives are usually involved as part of fund raising such as issuing convertible bonds and/or convertible preference shares.

Derivatives Derived from Contract Term(s)

Many companies do not have an active intention to gain exposure in derivatives. Their balance sheet still involves derivatives as a result of entering into various financing, business contracts and/or acquisition agreements. For example, profit guarantee provided by vendor will be a financial asset subject to fair value assessment. Depending on the mechanism of payouts, such guarantee contract can be a complicated financial derivative.

Valtech Group’s Advantage

Since the establishment of Valtech Valuation, we have been exploring and developing data and technology solutions to enhance and speed up the process of valuation.  Although it involves judgment and case specific assumptions in valuation, the use of semi-automation and data analytics solution in valuation can increase accountability and efficiency of the whole valuation process.