Agenda - Byron Shire Council - NSW Government

BYRON SHIRE COUNCIL
ORDINARY MEETING 9 MAY 2013 (32)
Bendigo & Adelaide Bank TD 21/3/13 2,000,000.00 2,000,000.00 0.00
ME Bank TD 25/3/13 1,000,000.00 1,000,000.00 0.00
Police Credit Union TD 28/3/13 2,000,000.00 2,000,000.00 0.00
CBA Business On-Line Saver Withdrawals Cash Various 8,100,000.00 8,100,000.00 0.00
Total Investments Matured 21,100,000.00 21,100,000.00 0.00
Fair Value Movement February to March 0.00 (1,570.00) (1,570.00)
Closing Balance at 31 March 2013 59,120,181.48 58,586,841.48 (533,340.00)
5
This unrealised loss is a consequence of the lingering effects of the Global Financial Crisis. Some
of Council’s investments are linked to the Credit and Equity Markets which have been adversely
affected and are yet to recover. A breakdown of this can be seen in the table below. The figures
are for March 2013.
Dissection of Council Investment Portfolio as at 31 March 2013
Principal ($) Investment Linked to:- Current Value Cumulative
Unrealised
Gain/(Loss)
42,771.000.00 TERM DEPOSITS 42,771.000.00 0.00
3,349,181.48 BUSINESS ONLINE SAVER 3,349,181.48 0.00
3,500,000.00 MANAGED FUNDS 3,320,250.00 (179,750.00)
3,000,000.00 CREDIT 2,937,660.00 (62,340.00)
6,000,000.00 EQUITY 5,694,250.00 (305,750.00)
500,000.00 BONDS 514,500.00 14,500.00
59,120,181.48 58,586,841.48 (533,340.00)
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15
20
25
Council uses a diversified mix of investments to achieve short, medium and long-term results.
Council’s historical strategy is to use credit/equity markets for exposure to long term growth. It
should be noted that Council’s exposure to credit/equity products is capital protected when held to
maturity, which ensures no matter what the market value of the product is at maturity, Council is
insured against any capital loss. The investment strategy associated with long term growth is now
prohibited under the current Ministerial Investment Order utilising credit/equity markets to seek
investment products. However, the ‘grandfathering’ provisions of the Ministerial Investment Order
provides Council can retain investments now prohibited until they mature. Council is also looking
continually at ‘switch’ opportunities for these investments in conjunction with its independent
investment advisors. Any ‘switch’ opportunities undertaken are reported to Council in the
investment report relating to the month the ‘switch’ occurred. Notwithstanding the current
valuations of credit/equity investments, these products will trend toward their full principal value as
they approach maturity.
Investments held as at 31 March 2013
Date Principal ($) Description CP* Rating M’ty Type Rate Current Value
24/7/07 1,000,000 AVERON II CP AAA 07/14 CR 0.00%* 935,000.00
22/4/08 2,000,000 ANZ TRANSFERABLE DEPOSIT N AA- 04/13 CR 4.36% 2,002,660.00
26/9/05 1,500,000 EMU NOTES CP AAA- 10/15 MFD 0.00%* 1,376,850.00
29/6/06 2,000,000 ALL SEASONS NOTE CP AA+ 08/14 MFD 0.00%* 1,943,400.00
22/6/06 1,000,000 HIGH INCOME NOTES CP A 06/13 E 0.00%* 980,600.00
Ordinary Meeting Agenda 09/05/13