Council Minutes - Town of Cambridge

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COUNCIL MINUTES TUESDAY 20 DECEMBER 2011 CR11.170 INVESTMENT SCHEDULE - NOVEMBER 2011 PURPOSE OF REPORT: To advise the Council of the amount of surplus funds invested, the distribution of those funds and the financial performance of each investment (ie. interest earned) year to date. BACKGROUND: Council’s Investment Policy No. 3.2.5 allows for investing of funds into direct investment products and managed funds which comply with both the credit risk rating and terms to maturity guidelines as set out in the policy. DETAILS: Investment Portfolio Performance At its December 2011 meeting, the Reserve Bank of Australia decided to reduce the cash rate by a further 0.25% to 4.25%. The Reserve Bank is concerned about the ongoing sovereign debt crisis in Europe which is still to be resolved and its noticeable impact on growth in Asia which has begun to slow down. It is expected that global growth will continue to slow throughout the forthcoming year. Economists are predicting further interest rates cuts during 2012. On the local economy, the mining industry continues to perform strongly although other industry sectors such as retail continue to struggle. The Reserve Bank's latest interest rate cut should give some relief to Australian households and business. Unemployment continues to remain close to five per cent. Inflation is expected to remain between the Reserve Bank's target of 2% to 3%. In terms of the Town’s investment portfolio, interest rates being obtained over the short term of two to three months are around 5.5% and 5.6%. Interest rates for securities for periods greater than six months are between 5.5% and 5.7% with the major Australian banks. The UBS Bank Bill Index rate (an index measuring performance of interest rates over a 90 day period) was 4.88% for November 2011. The 90 day BBSW or Bank Bill Swap rate (a measure of future interest rates) was 4.59% at 30 November 2011. As the Council’s investment portfolio is predominantly short term cash products, the cash rate of 4.50% for November 2011 is the more appropriate performance measure. Against these interest rate indicators, the Town's investment portfolio outperformed the cash rate with a weighted average interest rate of 5.80%. The weighted average investment period of 143 days (approximately five months) compares favourably with term deposit rates (with the major Australian banks) for this period which were an average of 5.6%. H:\CEO\GOV\COUNCIL MINUTES\11 MINUTES\DECEMBER 2011\C CR.DOCX 211
COUNCIL MINUTES TUESDAY 20 DECEMBER 2011 Investment Portfolio Performance for November 2011 The graph below shows the interest rate performance of the Town's investment portfolio for the 12 month period November 2010 to November 2011. Interest Rates 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 Investment Performance For November 2010 to November 2011 Weighted Avg Interest UBS Bank Bill Index Cash Rate The graph below shows the rolling 12 month weighted average investment performance of the Town's investment portfolio, since November 2008. Interest Rates Rolling Weighted Average Investment Performance For November 2008 to November 2011 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Weighted Avg Interest 90 UBS Bank Bill Index H:\CEO\GOV\COUNCIL MINUTES\11 MINUTES\DECEMBER 2011\C CR.DOCX 212
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Council Minutes 20 December 2011
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COUNCIL MINUTES TUESDAY 20 DECEMBER
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Page 163 and 164: COUNCIL MINUTES TUESDAY 20 DECEMBER
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Page 225 and 226: COUNCIL 20 DECEMBER 2011 Best Water
Page 227 and 228: COUNCIL 20 DECEMBER 2011 STRATEGIC
Page 229 and 230: COUNCIL 20 DECEMBER 2011 10.3 METRO
Page 231 and 232: COUNCIL 20 DECEMBER 2011 ADMINISTRA
Page 233 and 234: COUNCIL 20 DECEMBER 2011 (c) (d) (e
Page 235 and 236: COUNCIL 20 DECEMBER 2011 Discount P
Page 237 and 238: COUNCIL 20 DECEMBER 2011 A further
Page 239 and 240: COUNCIL 20 DECEMBER 2011 Amendment
Page 241 and 242: COUNCIL 20 DECEMBER 2011 (a) (b) (c
Page 243: COUNCIL 20 DECEMBER 2011 14. CLOSUR
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Council Minutes - Town of Cambridge

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