INTERNATIONAL INVESTING PROJECT – stock portfolio

GROUP INTERNATIONAL INVESTING PROJECT-25%
This project allows you to learn more about international investing and about companies
that compete in the global arena. You need to create a stock portfolio of at least 2
Australian multinational corporations and 2 foreign stocks. You willmonitorthe
performance of your portfolio over the school term and ultimately will attempt to explain
your portfolio performance. The explanations will offer insight into what is driving the
valuations of the Australia-based MNCs and the foreign stocks over time.
Select two stocks of Australia-based MNCsthat you want to include in your portfolio. If
you want to review a list of possible stocks or do not know the ticker symbol of the stocks
you want to invest in, go to the website https://au.finance.yahoo.com/. Make sure that your
companies conduct a substantial amount of international business.
Next, select two foreign stocks that are traded on the Australian Securities Exchange
(ASX) and are not from the same foreign country. Many foreign stocks are traded on the
ASX; go to the website https://www.essaybishop.com/write-my-essay/asx.com.au/products/foreign-entity-data.htm to get the
Foreign Exempt and Foreign Domicile companies listed on the ASX. You should select the
ASX code of the foreign company; for example, AIZ isthe ASX code for Air New Zealand.
You can use this ASX code to review the company’s background information, including a
description of its business and its stock price trend over the last year. It is assumed that you
will invest A$10,000 in each stock that you purchase. Your purchase price should be the closing
price of the stocks you have chosen as at 16th November 2018.
List your portfolio in the following format:
Australia-based MNC
Name of company Ticker symbol Amount of Investment Price per share at
purchase(16Nov2018)
A$10,000
A$10,000
Foreign stocks(ADRs)
Name of company Ticker
symbol
Country where
company is based
Amount of
Investment
Price per ADR at
purchase (16 Nov 2018)
A$10,000
A$10,000
You can easily monitor your portfolio using variousInternet tools. If you do not already
use a specific website for this purpose, go to https://au.finance.yahoo.com/. Follow the
instructions, and in a few minutes, you can create your own portfolio tracking system.
This system not only updates the values of your stocks but also provides charts, recent
news, and other information on the stocks in your portfolio.
EVALUATION
At the end of each week during the trimester, you should evaluate the performance and behavior of your
stocks. You are required to record the prices of the stock as at closing on Friday each week up to week 8
of the class. For example, your first week closing price should be taken after the stock market closed on
Friday, 23rd. November 2017 (end of week 3). Your final week of recording will be 11th January 2019.
Weekly stock price changes during the Mid-Term Break should also be recorded.
1) a. Determine the percentage increase or decrease in each of your stocks over the period of your
investment and report that percentage in a table like the one below for each week. In addition,
offer the primary reason for this change in the stock price based on news about that stock or your
own intuition. To review the recent news about each of your stocks, click on
https://au.finance.yahoo.com/ and insert the ticker symbol for each company. Recent news is
provided at the bottom of the screen.
WEEK 1
Name of company Stock price at end
of the week
Percentage change in
stock price
Primary reason
1.
2.
3.
4.
Portfolio(average)
b. Comment on your portfolio performance. If it is good, was it because of the markets where your
companies do their business or because of company-specific conditions? Please explain.
2) Determine whether the performance of each of your Australia-based MNCs is driven by the
Australian market. Go to the site https://au.finance.yahoo.com/ and insert the symbol for your stock.
Once the quote is provided, click on Interactive Chart. Then, click on Compare and type ^AXJO
(ASX 200) to assess the relationship between the Australian market index movements and the
stock’s price movements. Explain whether the stock’s price movements appear to be driven by
Australian market conditions. Repeat this task for each Australia based MNC in which you invested.
.
3) a. Determine whether the performance of each of your foreign stocks is driven by the corresponding
market where the company is based. First, go to the site https://au.finance.yahoo.com/worldindices
and look up the symbol for the country index of concern. For example, Shanghai
Composite’s index is 000001.SS. Next, go to https://au.finance.yahoo.com/ and insert the symbol
for your stock. Click on Interactive Chart. Then, click on Compare and type the symbol for your
index to assess the relationship between the market index movements and the stock’s price
movements. Explain whether the stock’s price movements appear to be driven by local market
conditions. Repeat this exercise for each foreign stock in which you invested.
b. Determine whether your foreign stock prices are highly correlated. Repeat the process just
described, except insert the symbol representing one of the foreign stocks you own in the box
below the chart.
c.Determine whether your foreign stock’s performance is driven by the Australian market (using the
S&P/ASX 200 as a market proxy). Erase the symbol you typed into the box below the chart, and
click on S&P just to the right.
4) a. Review annual reports and news about each of your Australia-based MNCs to determine where
they do most of their business and the foreign currency to which they are most exposed.
Determine whether your Australia-based MNC’s stock performance is influenced by the exchange
rate movements of the foreign currency (against the Australian dollar) to which it is most exposed.
Go to https://www.essaybishop.com/write-my-essay/oanda.com and click on Historical Exchange Rates. You can convert the foreign
currency to which the MNC is most exposed into Australian dollars and determine the exchange
rate movements over the period in which you invested in the stock. Provide your assessment of
the relationship between the currency’s exchange rate movements and the performance of the
stock over the investment period. Attempt to explain the relationship that you just found.
b. Repeat the steps in (4a) for each Australia-based MNC in which you invested.
5) a. Determine whether the stock performance of each of your foreign companies is influenced by the
exchange rate movements of the company’s local currency against the Australian dollar (you can
obtain thisinformation from https://www.essaybishop.com/write-my-essay/oanda.com). You can convert the foreign currency of
concern to Australian dollars and determine the exchange rate movements over the period in
which you invested in the stock. Provide your assessment of the relationship between the
currency’s exchange rate movements and the performance of the stock over the investment
period. Attempt to explain the relationship that you just found.
b. Repeat the steps in (5a) for each of the foreign stocks in which you invested.