You are the fund manager of a stock portfolio in one of established fund management company in Kuala Lumpur. On October 1, your portfolio consists of the eight stocks listed in the following table and you plan to sell on December 31. However, you are concerned about the stock market over the next three months. Your company’s technical analyst market overview as follows:

“The FBMKLCI Index ended lower yesterday on the back of weaker performances in overnight US markets. News of significant breakthrough in a Covid-19 vaccine promoted selling in rubber glove stocks again. The benchmark index shed 22.60 points or 1.49% to end the day at 1,496.72. Market breadth remained negative with losers continuing to outnumber gainers by 844 to 314. Yesterday, 7.69 billion shares valued at RM4.89 billion changed hands. The energy and healthcare sectors continued to bear the brunt of the selling, losing 1.53% and 4.90% respectively yesterday while the selling pressure is moderating in technology stocks. Technically, we expect the FBMKLCI to range between 1,435 and 1,530 for the next three months. The FBMKLCI is expected to fall to 1,475 in November and 1,435 in December.”

Stock Portfolio:

Stock Name	Number of holdings	Beta	Price as at October 1 (RM)	Forecasted price on December 31 (RM)
AXT	10,000	1.00	19.63	27.38
DLG	6,200	1.05	31.38	32.88
GEN	15,800	1.15	49.38	53.63
HAP	8,900	0.90	55.38	77.88
HLB	11,000	0.85	42.13	47.88
KLC	14,500	1.45	19.38	28.63
MAX	9,900	1.2	29.75	30.13
PET	4,500	0.95	24.75	26.00

On October 1, you decide to hedge your stock portfolio by using stock index futures contracts. Listed below the FKLI futures prices.

Futures Index	Month	Open	Last Done
FKLI	Sep-20	1,482.50	1,503.50
FKLI	Oct-20	1,482.50	1,500.00
FKLI	Dec-20	1,476.00	1,493.00
FKLI	Mar-21	1,467.50	1,487.00

Assuming you plan to hedge fully, determine your hedging benefits if both prices converged at the December index price. Justify your answer.