Investing Activities

TASCORP held investments of $2,650 million as at 30 June 2004. A large percentage of these funds represent client deposits. The balance comprises both the corporation's liquidity holdings (investments set aside to meet cash flow demands under both normal and extreme market conditions), and borrowings reinvested to meet up-coming debt repayment.

The corporation invests in cash and fixed interest securities rated by credit rating agencies such as Standard & Poor's and Moody's. Its investment holdings by credit rating as at 30 June 2004 are shown in Graph 5 below.

Graph 5

Client Lending Activities

During 2003/04 TASCORP financed the TT-Line's purchase of Spirit of Tasmania III, and made a number of new advances to other Government Business Enterprises and State Owned Corporations. This new lending offset the continued loan repayment by Government so that client advances remained relatively stable across the year.

Client Deposits & Managed Funds

TASCORP offers clients the opportunity to invest in both traditional bank-type deposits, as well as cash and fixed interest funds management products. Traditional deposit products are used by clients to manage their day to day cash flow. The cash and fixed interest managed funds are designed for cash reserves, sinking funds and other accumulating balances set aside for capital works or some other special purpose.

Client investments in our Cash Guaranteed Fund averaged $243 million during 2003/04 compared with $227 million last year. The Fixed Interest Guaranteed Fund remained fairly stable at $171 million compared with $175 million in 2002/03. This less than hoped for volume was offset by higher than expected investment returns so that by year end, income from the funds management business was slightly ahead of budget.

Advisory Services

The rollout of the expanded range of advisory services proved popular with clients this year. The corporation assisted ten clients with the review of their investment policies, and worked with a number of others on financing issues specific to them.