Ann: CER equity hedge update , page-11

Mcconnell: Yes there is a chance of having more hedges closed out before Xmas, provided the dollar does continue to increase, this is by no means a guarantee though as there are often predictions of the AUD rising and not eventuating. I think the important thing is that the recent hedge that was closed out was due to expire in 14mths, however the remaining hedges are not due for 24mths after that. It would however be good to have these closed out earlier (as i understand) as i dont know of any benefit for CER to choose not to close them out as soon as they can.

Regarding the SP: My belief is that other investors (private or institutional) are shying away from CER at the moment as:
1: it is unclear when dividends will be re-instated
2: It is unclear of the total costs still to be covered regarding the separation from CNP
3: It is unclear what the exact detail of CER's structure will be once the separation has occurred
4: There is no real movement in the US in return of consumer spending yet.

I dont think it has anything to do with possible dilution and would think that institutions are watching CER and waiting for slightly more clarity of the future before investing even if this does mean a reduction in gains for them as:
- they probably have their money invested elsewhere atm
- and also want to be VERY sure of them selves and the returns on CER due to the stigma still attached to centro within the general community and hence their investors.

I would be interested to hear other peoples thoughts on this.