Naveen Choppara, a Trader at Izzy Englander’s $62bn hedge fund firm Millennium Management who joined its Dubai office last year, capitalised on Egypt’s recent foreign exchange (FX) plunge, securing a $40m profit for the hedge fund giant, according to a report by Bloomberg.
The report cites unnamed sources in revealing Choppara’s wager on Egypt allowing the devaluation of its currency to combat a potential economic crisis, which paid off when the country’s central bank introduced an interest rate hike after the Egyptian pound fell 38% on 6 March. This was followed by Egypt and the International Monetary Fund striking a deal to more than double the country’s rescue program to $8bn, an effort which was helped along by the UAE via its Abu Dhabi wealth fund ADQ, having agreed to invest $35bn.
Choppara’s bet was made through non-deliverable forwards (NDFs), particularly those that agreed to the receipt of US dollars in exchange for Egyptian pounds over a period of months. According to Bloomberg’s sources, Choppara would profit at the time of devaluation from the difference between the new, far weaker spot rate for the Egyptian pound and the prices agreed in the NDF contracts. The cost of assembling the trade may have also reduced overall profit.
Egypt, a country of 105m people, has faced increased economic pressure after Russia’s invasion of Ukraine — being affected by rising commodity prices as one of the biggest global buyers of wheat — and the Israel-Hamas war — which has contributed to Egypt’s foreign exchange crisis.
Choppara was previously a Senior Trader in emerging market rates and foreign exchange at the Goldman Sachs Group, having first joined its London office in 2012. According to Bloomberg’s sources, Choppara made about $50m in annual profit by trading the Egyptian pound and the Nigerian naira.
