Hope so antimatter!Would anyone on here know what type of...

Hope so antimatter!

Would anyone on here know what type of forward rate CER is using as the basis to close out their equity hedges.

We're told in the presentation that the forward rate needs to be about 85 on average for the hedges to be closed out.

Would they be looking at a 3 month forward rate? A 2year forward rate? This should have been provided in the presentation but wasnt.......

i saw on CNBC last night that the 2 year forward rate was about 86. I wouldnt imagine CER would be using anything greater than this.

Lets say hypothetically the 2 year rate was used, with hedges ranging from spot rate 80 to 90 (as their former fund manager advised me), even if the 2year forward rate was used by CER to close out hedges, surely some of these hedges have been closed out by now.

the interest rate differential is one of the key differences between the spot rate and the forward rate. Even if Australian interest rates were to rise 300 basis points in the next 2 years and US interest rates 100 basis points in the next two years, the 2 year forward rate would be about 200 basis points less than the current spot rate? please correct me if I am wrong

With the spot rate sitting now at 88.35, the 2 year forward rate would be sitting somewhere in the mid 86s from a conservative point of view.

We probably need the spot rate to hit 92 for all equity hedges to be closed out in full. With the strength behind the little aussie battler at the moment, this may not be too far away!

Cheers