double banzai ! , page-4

The yen effect is two way:
1. Yes it decreases the A$ NTA but
2. It decreases the current loss on the FX contracts. The capital hedge MTM on 31 Dec 2008 was A$86.4m of which A$68.7m is subject to review in August 2009.

In current circumstances it is effect (2) which is more important as this is a substantial potential cash call of 13c per share in August.

A very crude calculation of the FX effect on this MTM. The capital hedge was taken out at Y101.9, the MTM of -A$86.4m was calc at Y62.45. So each Y1 appreciation created an MTM loss of A$2.19m. So as the Yen now depreciates the MTM should decline by approx A$2.2m per Y1. So if the Yen ended the day at Y69.45, that should mean the FX loss on the capital hedges since the 31 Dec calc has decreased by around A$15.4m or 3c per share.

There are also distribution hedges in place but these are at lower Yen FX rates of between Y67.9 & Y71.9. So at current FX rates not material either way.

The effect (1) of the FX on NTA is clearly illustrated on p21 of the interim. Which shows an NTA of A$1.61 at Y70, & A$1.48 at Y80.

The whole concept of FX hedging is a total nonsense from what I can see, causing additional uncertainty, and as with GJT even threatening the viability of a company engaging in it.