ending December2002, there has been a signiﬁcant decline in the size of international portfolios arising fromthe general decline in equity values.
2.3 CURRENCY VOLATILITYAgainst the background of these increasingly internationalised investment portfolios, what roledoes currency play?
16
Currency OverlayTable 2.2 Geographical market analysis, end-2002 estimatesInternational assetsCountry
Approx. size of funded DBpension funds (US$bn)
%
US$bn
5688112029840064322271751560768666
10%26%40%25%10%15%40%30%50%15%10%14%
569291119100643329238981251
USUKSwitzerlandNetherlandsJapanCanadaSwedenAustraliaHong KongGermanyBelgium/FranceTotal
Source: Record Currency Management Estimates, December 2002.
The measure I will adopt to record the movement in the currency markets is ‘currencysurprise’. Currency surprise is described in detail in Chapter 3, and in Box 2.2. There is aBox 2.2
Currency surprise
Currency surprise is the difference (usually expressed in percentage terms) between theforward rate at the start of the period (say month) in question, and the spot rate one monthlater (or whatever the frequency being measured).It is called ‘surprise’ because whereas the appreciation or depreciation implicit in theforward rates is anticipated, any deviation from this implicit depreciation or appreciation isa ‘surprise’, and is equally likely to be up as down. The graph illustrates currency surprise:Example of currency surprise(JPY/GBP – one month)
172170
JPY/GBP
168One month currencysurprise = GBP up by5.63% [=(1.69831.6073)/1.6158]
166Subsequent spot rate164
Forward 'fall line' on 27 June
16216015827 Jun
07 Jul
17 JulDate
27 Jul
06 Aug
The Problem
17
The reason that currency surprise is attractive is because it represents the only exploitablemeasure of currency movements. Since an investor can buy or sell a currency forward (atthe forward price), the proﬁt or loss he will experience when that contract reaches maturitywill be equal to the currency surprise.Note that to allow currency surprise to be added to or deducted from asset returns, thealgebra of the calculation has the spot rate at the start as the denominator. This is a uniquefeature of currency surprise – all other assets have their start value as the denominator. Seetext for a more detailed discussion of this point.large quantity of high-quality historical currency data available. Currency surprise can bereadily calculated from this data, and so we have a lot of information about currencysurprise.If we take the past 20 years (1981–2001), we can illustrate the scale of currency surprisemovements for major currencies in a matrix (Table 2.3). I have chosen six currencies [USdollar (USD), Japanese yen (JPY), Deutschmark/euro (DEM), pound sterling (GBP), Frenchfranc/euro (FRF)]. Note that the three-letter abbreviations in brackets are the ‘Swift’ codes (seeBox 2.3) for the currencies in question – Swift codes are the currency codes internationallyrecognised by the banking system. I will generally use them for labels and captions, and onlywith introduction elsewhere. Note also that for the two largest member states of the Eurozone,I have combined the euro rates post-1999 with the individual currency rates pre-1999.Table 2.3 illustrates a number of important characteristics of long-term currency surprise:(a) Currency surprise is zero sum if taken from all base currencies – this is logically true, notjust empirically true.Table 2.3 Currency surprise matrix 1981–2001NumeratorDenominator
USD
USD
JPY
DEM/EUR
GBP
FRF/EUR
1.39%(13.15%)
2.03%(12.00%)
0.36%(11.67%)
0.90%2.65%(11.91%) (13.05%)
0.62%(11.64%)
−1.04%(13.06%)
−0.50%1.24% −0.22%(11.75%) (11.64%)
−1.64%(9.27%)
−1.11%(2.58%)
JPY
−1.42%(13.25%)
DEM/EUR
−2.02%(12.04%)
−0.63%(11.59%)
GBP
−0.40%(11.61%)
1.01%(12.93%)
1.65%(9.21%)
FRF/EUR
−0.92%(11.86%)
0.49%(11.64%)
1.12%(2.54%)
−0.55%(9.39%)
CHF
−2.65%(13.12%)
−1.26%(11.62%)
−0.63%(4.77%)
−2.26%(10.21%)
−1.73%(5.34%)
Average
−1.48%
0.20%
0.96%
−1.03%
−0.39%
CHF
Average1.47%
0.62% −0.96%(4.76%)
0.51%2.28%(9.41%) (10.12%)
1.01%
1.74%(5.26%)
0.37%−1.71%
1.71%
0.0%
18
Currency Overlay
Box 2.3
Swift codes
In 1973 the international banking community formed a co-operative (‘Society for Worldwide Interbank Financial Telecommunication’ (SWIFT) to allow efﬁcient internationalelectronic cash transfer using common standards. SWIFT has devised unique three-lettercodes for all the world’s currencies. These are becoming increasingly used not just acrossthe market-making community, but also across the user community. They are supersedinga variety of less formal abbreviations for currencies, although in common usage informalabbreviations will undoubtedly continue to have an existence.As an example, the Swift code, and the informal abbreviations, for the Swiss franc areas follows:Swift code:Informal abbreviations:
CHFSFr, SwFr, SF
Swift codes for a selection of the more common traded currencies are shown below inalphabetical order:
Country/currency
Swiftcodes
Country/currency
Swiftcodes
Country/currency
Swiftcodes
Argentine pesoAustralian dollarBrazilian realBritish poundCanadian dollarChilean pesoChinese yuanCzech korunaDanish kroneEuropean euroHong Kong dollarHungarian forint
ARSAUDBRLGBPCADCLPCNYCZKDKKEURHKDHUF
Indian rupeeIndonesian rupiahIsraeli shekelJapanese yenKenyan shillingKorean wonMalaysian ringgitMexican pesoNew Zealand dollarNorwegian kronePhilippine pesoPolish zloty
INRIDRILSJPYKESKRWMYRMXNNZDNOKPHPPLN
Russian ruble (new)Saudi Arabian riyalSingapore dollarSouth African randSwedish kronaSwiss francTaiwan dollarThai bahtTurkish liraUS dollarVenezuelan bolivarZimbabwe dollar
RUBSARSGDZARSEKCHFTWDTHBTRLUSDVEBZWD
(b) It is empirically the case that many individual currency pairs have low or zero currencysurprise returns. We will come back to ‘expected return’ from currency later.(c) Annual volatilities in currencies are mostly in the 4–12% range – higher than bond volatilities (average c. 6% p.a.) but lower than equities (average c. 17% p.a.).It is also worth noting that despite the fact that the calculations are all done via logs, the returnsof the same relationship turned upside down (i.e. JPY/USD and USD/JPY) are not identical.This is because we have deﬁned currency surprise as:Currency surprise % = (Spot ratet − Forward ratet−1 )/Spot ratet−1notCurrency surprise % = (Spot ratet − Forward ratet−1 )/Forward ratet−1
The Problem
19
In the latter case, all the inverse currency surprises would be identical as long as we convertedthe currency surprise % to logs.The 20-year volatility averages mask very signiﬁcant variations in the volatility of currencies.Popular economic history will remind most readers that there are occasional currency ‘crises’,in which one or more currencies suffer a sharp movement versus others. These cannot be called‘crashes’, because unlike the equity market, when one currency ‘crashes’, another currencyhas to do the opposite of crash – it soars. We will return to this relative nature of exchangerates (one man’s gain is another man’s loss) later.We can show the variability of currency volatility by charting 20 years’ worth of 3-monthmoving averages of annual volatility calculated from daily prices. Figure 2.2 shows twocurrency pairs that illustrate this well – USD/GBP and JPY/USD. Each of the spikes areparticular events which are well documented. For example, Sep 1985 in USD/GBP is the‘Plaza Accord’ – the G5 meeting that agreed to ‘manage the dollar down’. The spike in Oct1998 for the JPY/USD is the rapid appreciation of the yen as hedge funds unwind their ‘yencarry’3 positions.
40%JPY/USDUSD/GBP
Volatility % p.a.
30%
20%
10%
0%80
82
84
86
88
90
92
94
96
98
00
02
Year
Figure 2.2 JPY/USD and USD/GBP volatility (3-month moving average annualised volatility calculated from daily prices 1980–2002)
So to summarise, international investors have chosen to invest in international assets (mainlyequities) for their diversiﬁcation properties. In doing so, they wittingly or unwittingly have alsoinvested in the currency surprise between their base currency and the currency of denominationof their equities. For the remainder of the book, whenever I refer to currency returns, I will bereferring to currency surprise.3‘Yen carry’ positions were those that took advantage of lower interest rates in the yen compared to the dollar to ‘borrow’ yen andinvest the proceeds in dollars, and be ‘paid’ for the privilege. (The ‘borrowing’ and ‘lending’ can be replicated cheaper using forwardcurrency contracts.) This tactic only works if the yen appreciates by less than the interest rate differential over the horizon of the trde.
20
Currency Overlay
Box 2.4
Volatility
The measure volatility as used in the ﬁnancial world is a measure (normally annualised)of the standard deviation of the periodic returns of an investment, asset class or portfolio.This is the most commonly used measure of the risk of investments, and the formula for itscalculation is: n (ri − r )2 i=1SD =n−1where ri = ith period return, r̄ = average value of r in the sample, and n = number ofobservations in the sample.If the periodic returns that are recorded are, say, monthly,√ then the convention is toannualise by multiplying the calculated monthly volatility by 12. This conversion relies forits accuracy on a mathematical theorem known as the Central Limit Theorem. The CentralLimit Theorem requires certain assumptions to hold for it to accurately describe statisticalbehaviour, in particular that the values being measured are normal and independent randomvariables. Chapter 5 (and Appendix 2) describe the importance of logs in ensuring that thiscalculation is accurate.
2.4 CORPORATE PARALLELS IN CROSS-BORDER INVESTING2.4.1 Foreign assetsPension funds are not the only international investors. Many companies choose to invest outsidetheir home country, and in the past 20 years this has been on a large and growing scale. Thenature of investment varies widely, but can be broadly categorised into (a) direct investment inplant, machinery and business infrastructure and (b) purchase of an existing foreign business.There are established guidelines4 laid down by national accounting standards boards, whichdetermine the value placed on overseas assets (indeed all assets), and which also determinethe method by which balance sheet value in a foreign currency is converted into balance sheetvalue in the home currency. However the conversion details are framed, companies’ balancesheets (and overseas earnings) have been affected directly and one-for-one by changes in theexchange rates at which they convert their overseas values into their home currency.This currency exposure has long been recognised as a ﬁnancial risk to a business, andcompanies have employed ﬁnancial and other strategies to reduce or eliminate the risk. Beforewe look at the economic impact of those strategies, we should look very brieﬂy at the otherside of the balance sheet – foreign debt.2.4.2 Foreign debtAs we will see below, companies with foreign assets routinely take on foreign debt. But largeand/or international companies also routinely tap the international bond markets for long-term4These are called Generally Accepted Accounting Principles in the US, similar in the other major standard setters (UK). There isalso an International Accounting Standards Board which has a remit to standardise all major standards under its auspices by 2005.
The Problem
Box 2.5
21
The euro
At the time of writing (2002), the euro is the single currency for 12 EU member states(Germany, France, Italy, Spain, Netherlands, Austria, Belgium, Finland, Portugal, Ireland,Greece, Luxembourg). The euro was launched in January 1999 with 11 members – Greecenot joining initially because it failed the economic assessment. Greece subsequently joinedin January 2001.Three EU member states are not members of the Eurozone – UK, Denmark and Sweden.Denmark held a referendum (in September 2000) in which the Danes voted 53% to 47%not to join the European Single Currency. The UK government has said that it will not enterthe Eurozone without a referendum, and that may be held before 2005. Sweden has notheld a referendum yet, but will be doing so, according to the Prime Minister, ‘before 2005’.The euro is governed by the European Central Bank, set up under EU Treaties. The ECBhas the sole responsibility for monetary policy in respect of the euro. There is a commoninterest rate across the Eurozone, and rules limiting the ﬁscal ﬂexibility of member states.The principal rule is that ﬁscal deﬁcits must not exceed 3% p.a.; failure by individual statesto meet this target will be met, in theory, by ﬁnes, although these have not yet been requiredor imposed. Portugal’s 2001 public accounts show that it has become the ﬁrst state to breakthe 3% limit; Germany has admitted it will break the limit in 2002.debt ﬁnancing at the most competitive rates. They may borrow in currencies in which they haveno natural exposure. However, is it extremely unusual for companies to choose to borrow ina foreign currency on price or investor-demand grounds, and to leave such currency exposureunhedged.The instrument of choice for hedging foreign debt (or foreign bond issues) is the currencyswap.2.4.3 Economic impact of corporate currency exposureBalance sheet currency exposure is not welcomed by CFOs. They intuitively understand thatit brings unrewarded volatility, even if they have not thought in detail about the rewards or therisks, nor examined the historical evidence. As a result, they expend a considerable amount oftime and effort in minimising their net currency exposure.In modern reports and accounts, companies spend a signiﬁcant effort in disclosing theircurrency exposure, the instruments they have used to reduce or eliminate that exposure, andanalyses of the sensitivities of the proﬁt and loss and balance sheet to exchange rate movements.This highlights the mismatch between the sensitivity with which companies treat their ‘own’balance sheets, and the lack of perceived investor interest in the ﬁnancial exposures of thecompany’s pension fund.If we make the assumption that the company is the ‘owner’ of their pension fund assetsnet of pension fund liabilities, and that this is symmetrical (i.e. surpluses can ultimately berecovered by the company – deﬁcits certainly will!), then we can make an assessment ona stylised company of the relative importance of direct balance sheet foreign assets versuspension fund foreign assets. Let us take a UK company, with foreign subsidiaries accountingfor 30% of gross assets, and 15% of net assets (i.e. funded with foreign currency debt). It hasa pension fund equal to 100% of its net assets, and it has 30% in international assets. The
22
Currency Overlay
Box 2.6
Swaps
Swaps are a class of ‘derivative’ contract. They were developed and became popular inthe 1980s and 1990s to allow companies to tap bond ﬁnance in countries where there wasinvestor demand, or to alter the maturity of the interest rate ﬁx, again to match the differentneeds of both the company and investor.In a currency swap, the contract provides for one party to pay to the other a stream ofinterest payments, plus principal at maturity in one currency, while the other party agreesto pay a stream of interest payments plus principal at maturity in another currency. Theinterest rates applying to the two currencies will be different, and will reﬂect the domesticmonetary conditions in the two countries.In an interest rate swap, the contract provides for one party to pay to the other a streamof ﬂoating interest payments (e.g. linked to LIBOR) in one currency, while the other partyagrees to pay a stream of ﬁxed interest payments in the same currency. The interest ratesapplying to the ﬁxed payments, and the LIBOR-based ﬂoating payments, will reﬂect themonetary conditions in the currency concerned.There are many other swaps now available to convert one type of ﬁnancial payment intoanother – the scope is almost limitless. The ‘ﬁnancial engineers’ who develop and marketswaps are investment banks, who will trade and hedge them on their own account.currency exposure in the pension fund of such a company (and these ﬁgures are typical for theUK) will be double that of the exposure in the company. It is safe to assume from the reportingconventions that companies currently adopt, that such a company would spend at least a page,and probably more, describing the proﬁt and loss and balance sheet sensitivity to currency, anda similar length explaining treasury policy, instruments and risk control in relation to currencyrisk. It is quite likely that an effectively identical risk (currency risk in the pension fund) willnot even be published, let alone analysed. This ‘immunity’ that CFOs believe they have in thepension fund may be one of the reasons that the standard remains unhedged currency exposurefor pension foreign assets, but hedged in the balance sheet ‘proper’ exposures.
3Currency Hedging3.1 INSTRUMENTS AVAILABLEThe purpose of currency hedging is to reduce or eliminate currency exposure. Currency exposure as it relates to investment assets means that the market valuation of foreign assets varies(positively) with movements of the foreign currency. It follows that an instrument whose market valuation varies negatively with that foreign currency will reduce or eliminate (if held inthe right quantity) the currency variations of the asset. What instruments are there that canperform such a task?Listed here is a full (but not necessarily comprehensive) selection of the principal ones:
r Foreign debtr Forward currency contractsr Currency swapsr Currency futures contractsr Currency options
Let us take these ﬁve instruments in turn, looking at three issues for each: the nature of theinstrument; the costs of using the instrument; and the shape of the instrument’s sensitivity inmarket valuation to currency movements.3.1.1 Foreign debt3.1.1.1 NatureForeign debt is fairly self-explanatory (and was brieﬂy discussed in the previous chapter), butto recap: foreign debt will act as a hedge to a foreign asset if the proceeds from the debt areconverted into the home currency (and these proceeds put on term deposit or used to buy amonetary investment that matches the term of the loan). If the proceeds of the loan are used tobuy the foreign asset in the ﬁrst place, then the proceeds do not need to be repatriated, sincethere will not need to be a purchase of foreign currency to buy the assets. The one attractivefeature of using debt to hedge foreign assets is the lack of ‘interim cash ﬂow’. That is, duringthe life of the debt, there will be no call on the investor for extra cash.The use of foreign debt by pension funds to hedge is extremely rare, in fact almost unheardof, because the majority of pension trust deeds do not allow borrowing. The use of foreign debtis also rare in life funds, but is much more common in investment trusts or other less heavilyregulated vehicles.3.1.1.2 CostsUsing debt as a hedging instrument (without the need for the debt for gearing in the fund) isexpensive. If the debt is short- to medium-term (say 1–5 years), a typical spread over LIBORfor an otherwise ungeared investment fund, acting clearing within its powers, would be in the
24
Currency Overlay
50–100 bp5 range. The equivalent deposit rate for the same entity would be at LIBID, whichis 8–12 bp below LIBOR, depending on the currency. In addition, a lending institution wouldrequire documentation a couple of inches thick. This will all have a cost associated with it.It might be possible for a fund to borrow money much more cheaply (say <10 bp p.a. creditspread) if the debt was fully collateralised. But this would severely limit the ﬂexibility of thefund as to the nature of acceptable capital and its active management.In summary, an annual cost estimate for the use of foreign debt to hedge foreign currencydebt is 60–110 bp, say average 75 bp.3.1.1.3 SensitivityForeign currency debt is a ‘straight line’ hedge – that is, if the debt value equals the assetvalue, then it will fully eliminate foreign currency risks. As a simple example: suppose afund, denominated in dollars, invests $100 in the UK markets, with an initial exchange rate of$/£ = 1.50. The cost of the asset in sterling terms will be £66.66. Assuming for the moment that the underlying asset does not move in sterling terms, how does the value of theasset move in dollar terms in relation to $/£ movement? Figure 3.1 shows the shape of thevalue.
$m
130
Asset
−70
120
Debt valuation
−80
110
−90
100
−100
90
−110
80
−120
70
−130
601.00
$m
−60
140
−1401.10
1.20
1.30
1.40
1.50
1.60
1.70
1.80
1.90
2.00
$/£
Figure 3.1 Foreign asset and debt sensitivity versus exchange rate ($/£ to $ base)
However, this simple picture is complicated by a number of factors. The ﬁrst is that theasset value will not be constant. If the asset value rises, then the level of debt will need to beincreased to equal the new asset value. If the debt is not increased, then the asset will be lessthan 100% hedged, and exchange rates will begin to affect the net asset value (i.e. asset anddebt together). Conversely, if the asset value falls, the debt will need to be reduced to avoidover-hedging.5
1 bp = 1 basis point = 0.01%.
Currency Hedging
25
Secondly, the proceeds of the debt will need to be invested. This deposit needs to matchas closely as possible the characteristics of the debt, otherwise there will be relative valuationmismatches.Which brings us to the third point. If the investor has a marked-to-market valuation regime,then the debt should be valued at market, rather than its face value (i.e. the amount owed).This may drive an additional wedge between the asset and debt values, which will need to beadjusted for if a full hedge is genuinely desired.In summary, foreign debt is an unwieldy and expensive means to achieving the desired end.3.1.2 Forward contracts3.1.2.1 NatureForward currency contracts are contracts between two parties for the exchange of an agreedamount of currencies at a ﬁxed exchange rate on a ﬁxed date in the future (see Box 3.1).They rely on the mutual creditworthiness of each party for the other to fulﬁl its obligations,irrespective of the proﬁtability of the deal by the time it reaches maturity. They are generally,although not exclusively, for maturities up to one year.Box 3.1
Forward currency contracts
Forward currency contracts are very simple instruments – they are contracts between twoparties for the exchange of currencies at a ﬁxed exchange rate on a ﬁxed date in the future.The amounts of currency, the direction of ﬂow, the exchange rate and the date are all agreedon a voluntary basis between the parties at the start of the contracts. The only fulﬁlmentrequired of each party is to deliver a speciﬁed amount of a currency to the other on a givendate.Forward currency contracts are easy to understand, and they were for many years thenatural instrument for hedging foreign exchange. Why do I use the past tense?Until the advent, in the 1980s and 1990s, of large and sophisticated corporate treasuries,and the development of cross-border investing, the vast bulk of the needs of banks’ customersworldwide were for contracts to ensure the delivery of foreign currency they owed or wereowed at a ﬁxed exchange rate. As a result, forward contracts became a very widely-used andliquid instrument. Fierce competition between market makers led to a continuous loweringof the cost of transactions (the bid/offer spread). This, together with a lack of regulatoryintervention, meant that forward contracts became the contract of choice for all the usersof the currency market, not just those who needed to make or take physical delivery ofcurrencies. Forward contracts are now most commonly used to hedge the market impact offoreign currency movements, not to secure future currency ﬂows.Forward contracts rely on the mutual credit status of the parties to each bilateral deal.Each of the parties has to be prepared to wait until the contract maturity date for theirmoney, with no ‘top-ups’ or margins during the life of the contract.A forward contract is initiated with a maturity date agreed between the parties. This willbe a business day, and is the date on which two currencies have to be mutually delivered, for‘value’ that day (i.e. no further time for ‘clearing’ required). There is an established processwithin the currency market for establishing which days are business days – i.e. avoiding BankHolidays and weekends.
26
Currency Overlay
The contract’s ‘expiry date’ is two working days prior to the maturity date. This is the dateon which the reversing deal would be a spot deal, and so is the last convenient date on whichavoiding action can be taken if delivery of the principal is not contemplated. Spot deals inthe currency market are, by convention, for delivery of the principal in two business days’time.Forward contracts are not, strictly speaking, derivatives. They are not contractually dependent on any other market for their fulﬁlment or their ﬁnal settlement. However, when markedto market, their value varies with exchange rates linearly (but note comments in Box 5.1 later).3.1.2.2 CostsForward contracts do not have any costs ‘built in’ to them. The process of delivery may havesmall transmission costs associated with it, but the convention is for currency to be delivered tothe recipient free of all charges. The way in which the foreign exchange market-makers maketheir living is by quoting higher prices to sell, lower to buy (see Boxes 3.2 and 3.3).The market provides customers with a great deal of information about pricing via FX screennetworks. Prices are fed into the networks by bank market-makers, and these are instantlydisseminated to users worldwide. The scale and activity of the market is such that new quotesare entered every few seconds at the busiest times of day.Box 3.2
FX swaps
FX swaps (not to be confused with interest rate or currency swaps) are a pair of currencytransactions wrapped up into one price. They allow a customer to simultaneously, say, sella currency spot and buy it forward for delivery at a ﬁxed date in the future.If a spot currency rate for currencies A and B is expressed as A/B (i.e. the number ofunits of A to buy B), A is the numerator and B is the denominator. Suppose A is $ and B is£; the bid and offer quotes might be 1.4363/65. This means that the bank will buy (the bid)sterling (the denominator) from the customer at 1.4363, and sell (the offer) sterling to thecustomer at 1.4365. The ﬁrst quoted number is always the lower one, and it is called the‘left-hand side’ (LHS) of the quote. The other side is the RHS.Swaps are quoted as the difference, in FX points (in this case 1/10 000th dollar) betweenthe spot rate and the forward rate. The quote for the same exchange rate as above, but thistime for delivery in one year, might be 1.3998/1.4004. If we subtract the spot rate fromeach side of the quote, we get values (called ‘FX swap points’) – in this case −365 points(1.3998 − 1.4363) for the LHS, and −361 points (1.4004 − 1.4365) for the RHS.These swap points are generally quoted stand-alone (−365/−361) – and it is possible forthe customer to undertake the swap without the associated spot deal. Suppose the customer ison the LHS (wishing to sell sterling forward). This would entail the customer contracting tosell sterling (vs. dollars) at 365 FX points lower than the rate at which he buys sterling spot.In such a deal, a notional spot rate (the market rate at the time) is agreed to allow ﬁxedprices to be assigned to each leg of the contract. The bank will want to use the RHS of thespot, to disadvantage the spot deal from the perspective of the client (and simultaneouslyadvantage the distant deal), and the customer will want the LHS of the spot rate for thesame reason. This is because of differences in the timing of the cash ﬂow, although theoverall effect is very slight. See also Box 3.3.
LHS
Spot
RHS
LHSRHS
1m FwdLHS
c WM/Reuters. Reproduced by kind permission.
LHS−0.007220.00356−1