Posted: 21 Oct 2021
NZUs have traded a range of $64.60 - $65.00 over the last week.
What is interesting is that despite the huge rally in NZU values, we continue to note a fair bit of reluctance among those who could sell, with some saying that they're now simply taking next year's CCR trigger price of $70 and discounting back on some basis that feels appropriate to them.
That logic rests on running scenarios as to when the CCR ($70 trigger price) gets called on next year, if indeed that happens.
The idea is that if NZUs hit $70 - say, at auction no 3 (September 2022), then at a discount rate of say 3.5%, a seller might hold out to receive $67.70 before entertaining a spot sale today.
If you're more bullish, and believe that the CCR will get gobbled up at auction no 1, the same logic might see the imaginary asking price rise to $69 today. So for many, we just aren't quite there yet.
Read more in our newsletter