cer will trade below 4 cents, page-6

Blastoff

Agree. its the derivatives issue that is the problem.

Occupancy levels in the US are strong. its non-discetionary focus will help cushion any further softening in the US economy. That's not the issue.

As CER confirmed to me: "With the Australian dollar currently trading in the mid 60s, the net investment hedges are significantly out of the money, comprising approximately 80% of the Trust's MTM liability of $873m. The equity hedge contracts are priced in the approximately range of $0.80 to $0.90. "

According to page 33 of the presentation:

"Agreed to close out existing principal components of equity

hedges when the MTM values of the hedges are zero.

– Equity hedges are long dated (4.5 year average maturity)

– Due and payable at expiry of contracts if MTM is out of the money"



Does anyone seriously think the AUD will not appreciate between now and 2013?

I dont think theres much to worry about.

If the exchange rate does get back to 80-90 in that time, we can write back a significant portion of the NTA that we've lost in the last 6 months with no effect on cash.