Council investment market value increases

The latest Gosford Council Investment Report has shown a steady increase in the market value of council securities.

Council has taken advantage of considerably narrow margins on floating rate notes and has sold its Westpac May 2016 floating rate notes at a premium above par.

The proceeds have been reinvested in a Westpac three year term deposition, which is expected to provide better overall returns over the upcoming years.

As at May, council's investment portfolio had a current market valuation of $52,891,516 on a face value of $60,635,931.

When compared to the previous month, all of the 10 structured securities held showed an increase in their market value.

The net market value increase for the period was $141,600.

Council's investment portfolio return outperformed the bank bill index benchmark during the month, with the figures standing at 7.38 per cent per annum and 3.07 per cent per annum respectively.

Council's portfolio is expected to return above benchmark returns if there are no further credit events within its CDO portfolio.

In his report, corporate services director Mr Nic Pasternatsky said this was because the CDO portfolio is currently valued at low levels.

Without marked-to-market influences, council's investment portfolios yielded 4.35 per cent per annum during the month, he said.

He said that all investments had been placed in accordance with council's investment policy, section 625 of the Local Government Act and the Revised Ministerial Investment Order gazetted 11 February 2011.

They also accorded with clause 212 of the Local Government (General) Regulations 2005 and the third party investment requirements of the Department Local Government Circular 06-70, he said.

He said it also continued to obtain independent financial advice on its investment portfolio in accordance with the Department of Local Government Circular of 16 September 2008.

Gosford Council Agenda COR.52, 2 Jul 2013