Like indices used in commodity and equity markets, the Aither southern Murray–Darling Basin Entitlement Index (AEI) provides a simple overall snapshot of how the major water entitlements in the southern MDB are performing. Updated monthly and freely available, water market participants can use the AEI to benchmark the capital value performance of water portfolios and investments over time.
The following dot points explain the AEI scope and method:
Scope: The AEI tracks the performance (capital value) of a group of major water entitlement types across the southern MDB. The AEI covers the following entitlement types: NSW Murray HS; NSW Murray GS; NSW Murrumbidgee HS; NSW Murrumbidgee GS; VIC 7 Murray (Barmah to SA) HRWS; VIC 7 Murray (Barmah to SA) LRWS; VIC 1A Greater Goulburn HRWS; VIC 1A Greater Goulburn LRWS; VIC 6 Murray (Dart to Barmah) HRWS; VIC 6 Murray (Dart to Barmah) LRWS; SA Murray (Class 3) HS.
Timing: The AEI is calculated on a monthly basis and is indexed to 100 in July 2008. The index commenced from this date as this is when sufficiently reliable data became available.
Prices: Historical monthly entitlement prices are calculated as volume weighted averages from state water register data. Since June 2015, Aither has used prices based on monthly entitlement valuations that we undertake in-house.
Index method: The computation of the AEI uses a Tornqvist-Theil Price Index method. The AEI is not an accumulation index