Analysis of Australian Financial Market

ANALYSIS OF AUSTRALIAN FINANCIAL MARKET

Table of Contents
ABSTRACT....................................................................................................................................3
INTRODUCTION...........................................................................................................................4
2.1. Analysis of Australian financial market structure................................................................4
Market sectors..............................................................................................................................4
Market regulators.........................................................................................................................4
Types of markets..........................................................................................................................5
Types of Financial Institution......................................................................................................6
2.2. Identifying the sources of financial service and financial information available for investors
in Australia.......................................................................................................................................6
2.3 Analysis of popular tools of capital budgeting (investment criteria) for Australian firms........8
2.4. Analysis of the Australian Bond market...................................................................................8
2.5. Analysis of Australian Share market........................................................................................9
2.6. Identifying and recommending of a potential industry for financial investment.....................9
2.7 conclusion................................................................................................................................10
References......................................................................................................................................11
ABSTRACT
The paper highlights the development of the Australian financial system and the Australian stock
market. A range of influences in the financial sector development and the various regulation
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policies that have been put in place, the markets that exist within the financial system that are
critical ,the stock markets reforms that have been employed and as a result of the reforms the
stock market in Australia has developed. The effect in net has been a transformation in the
Financial system in Australia from a relatively closed, the early structures were oligopolistic in
nature and were based predominantly on the bank intermediation traditionally and a more open
and system that is competitive that also offers a much wider variety of different services from
different providers. This evolution system of financial system, that is well driven largely moved
by forces that exist in the market and through assistance of prevailing regulations and
supervision arrangements
INTRODUCTION
Just like any other industrial countries in the world, Australia has for a long time experienced
major changes to its system of finance in the recent decades. The effect in net has been a
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transformation in the Financial system in Australia from a relatively closed, the early structures
were oligopolistic in nature and were based predominantly on the bank intermediation
traditionally and a more open and system that is competitive that also offers a much wider
variety of different services from different providers. This evolution system of financial system,
that is well driven largely moved by forces that exist in the market and through assistance of
prevailing regulations and supervision arrangements.
After the global crisis of 2007 and 2008, the senate commission of Australia was formed to
instigate an inquiry to the financial system it seeked to ensure that financial solidity and
feasibility of the system in banking sector and by 2015 the regulators remained concerned
regarding misconduct problems in the banking system.
According to RBA (2017), they pursued to exhibit the obtainable information on the race in the
banking segment and various progresses have been discussed in the key market highlighted. The
banks support several many key issues including the status of customers and able to apply viable
pressure on financial organizations.
2.1. Analysis of Australian financial market structure
Market sectors
There are several existing markets sectors and players in the Australian market that is composed
of the Capital market and the Financial markets.
The Australian market has a very advanced financial service segment and is perfectly placed as
a midpoint for the Asia-Pacific services sector and is ideally positioned well. This has been
verified by profound and liquid financial market and area control in investment administration as
well as areas of funding infrastructure and organized products. The markets are highly developed
and a major center for the capital markets. The financial industry is categorized in a number of
sectors, asset-based finance, funds management, hedge funds, insurance, investment banking,
private banking , private equity amongst others.
Market regulators
Australian financial systems employ a market prudential regulation measure. The present system
of financial regulation dates bank in 1996 once the Government of Australia established the
financial system inquiry.
a. Housing market measures
This market measure is adopted by the APRA (Australian Prudential Regulation Authority) and
has since been supported by CFR (Council of Financial Regulators) in the financial year 2014
and fiscal year 2017, the two bodies suggestions were detrimental to the competition ( PC ,2018).
The banks always are supporting the measures. APRA is primarily a agency tasked with a
supervisory role and the principal aim is to guarantee that the financial possibilities made by
firms are met with efficient, steady and viable financial markets. Like all regulators there are
challenges that are faced with the regulators in keeping up the rapidly evolving and ever
increasing complex financial service sector, and to add to it incase of a corporate failure or
collapse it often involves an element of fraud and thus makes it hard to be detected prior to the
inevitable occurrence (APRA, 2018)
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