5EA set to skyrocket, page-573

I take it we are feeling better on FEAM now its at US$9.34 and rising and wit AUDUSD = 0.68769 = AUD$1.358. NASDAQ volume though coming back down.

As ASX investors, we take the currency risk here that US investors do not (especially as the flow of shares is from ASX to NASDAQ)

Just to illustrate this (as this risk did not exist when FEAM was solely listed on ASX) with a range of FX and stock price. The scenario which present probably the greater risk to use (not the Australian economy as a whole) is a stronger Aussie Dollar vs the US. This means the US$ overall is declining against all the major currencies (which isn't a bad thing for currencies as since USD is the global reserve currency and most commodities are priced in USD, the producer would then raise their commodity price to maintain their purchasing power. Oil is a great example of that).

So even if FEAM fundamentals were going great (relative to others), its possible for the CDI to "lose" value purely due to FX. In the tables below, Say NASDAQ was at $7.50 and FX at 0.6667 then ASX is at $11.25 (the first yellow box). But if "overnight" some event occurs that knocks down the USD - so AUD goes up to FX = 0.75 then the ASX shares would drop to $10 (the red box) from $11.25 (more than 10%) from no change to company fundamentals (I'm assuming NASDAQ stays at $7.50 because I said it was doing great relative to others ... so in this scenario the others have likely go down in their share price also).

The green box scenario is more the global economy is going great so demand is high, prices are high (and USD weakening). But instead of getting $22.50 (the green box) we only get $20 (the second yellow box) - so we give up some gains due to Aussie dollar strengthening.





Now to cement those gains with visible change in company actions.