Fixed interest returned 0.78% over the quarter ending 31 March
2012 while cash returned 1.12%.
The RBA left the official cash rate unchanged over the quarter
at 4.25%. Minutes from the March Board meeting provide an insight
into their deliberations:
"...weakness in parts of the economy –
including manufacturing, building construction and parts of the
retail sector – was being approximately balanced by the
strength in the mining sector and some service
"on balance the Board considered that it was
appropriate for interest rates to be around their average levels,
which was judged to be the case at present."..... RBA
Minutes 6 March 2012
These comments are important because they confirm that:
The RBA believes that growth is running close to trend (Among
other things, they point to the unemployment rate which remains low
and relatively static despite recent manufacturing job losses);
With growth close to trend, the RBA has now clearly adopted a
neutral interest rate setting. This means it views inflationary
risks as being evenly balanced, which is about right as underlying
inflation remains in the mid-range of its target. With inflation
under control, the RBA will reduce rates if (but only if) growth
With China slowing and commodity prices easing, it is possible
that some mining projects may be deferred which would reduce
inflationary pressures and provide the RBA with some scope to ease
rates modestly. Whether this occurs over the June quarter remains
to be seen but we believe the probability is increasing. In
conclusion, we continue to recommend an overweight cash position
and a neutral fixed interest exposure.
A judgment recently handed down by Rares J of the Federal Court of Australia stemming from the myriad litigation involving Timbercorp Group and their agricultural managed investment schemes provides guidance in the interpretation of the legal effect of the statutory novation procedure contained in Chapter 5C of the Corporations Act 2001 (Act). The judgment also deals authoritatively with the issue of whether a party can conclusively determine the capacity in which that party enters into a contra
An actuarial review of the Invensys Australia Superannuation Fund showed it to be in surplus to the tune of $189.2 million. In mid 2003, the Invensys Group proposed to the trustee that the surplus be repatriated to the principal employer in the group.
To implement innovative people strategies that allow the creative genius to flourish, we must manage creative output.
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