mre commenting re currency 35 price target

FROM MRE RE CURRENCY:

Importantly, currency sensitivity was provided for the first time. A 1% change in the A$ relative to all currencies (sustained for 12 months) equates to a FY07 NPAT impact of ~$10m, or 0.5% based on MRE’s FY07 NPAT forecasts. This disclosure should alleviate any exaggerated fears regarding excessive adverse leverage to recent A$ strength. QBE also stated that subject to exchange rates, closing gross Funds Under Management (FUM) is expected to be ~$28bn by the end of FY07 and around $30bn by FY08.

MRE reiterate their outperform recommendation and 12-month price target of $35.08.

So if my math is correct even if theres an overall 10% move up in the currency, that would mean a 5% overall impact on earnings

that would mean if AUD was around 90, there would only be a 5% inpact on EPS growth

They said in AGM that they expect a 20% increase in FY07 NPAT and 15% increase in diluted EPS , and that was only last week and they obviously took into account that AUD would be a little higher when making these forecasts!

thus the currency going to say avg 85 wont have really that much of an impact on NPAT/EPS; Even AUD/USD at 90 is only 5% give or take.