Exploring Investment Options in Fiji: Opportunities and Risks

The assignment content discusses various investment options in Fiji, including shares and securities, fixed income bearing securities, and property. It highlights the benefits of investing in shares and securities, such as receiving dividend income and capital appreciation. However, it also notes that this option carries a higher risk level compared to other investment options. The content also analyzes the securities of two listed companies in Fiji, Amalgamated Telecom Holdings Ltd (ATH) and Communications (Fiji) Ltd, finding that ATH has adopted a smart investment strategy with a high return on investment, while CFL takes a more moderate approach with lower returns.

0 | P a g e
[Company name]
[Document title]
[Document subtitle]
Asus
[Date]

Executive summary
This project analyses the risk and return investment theory, where investors
formulates a strategy for investments. Here In this project report we are analysing the
importance of investment decision, along with the illustration of five alternative
investment option in Fiji, here we are comparing the each alternative option with the
risk and return theories, and critically evaluate each option with the reason for
different in values, this project report also take a date and information of two listed
companies for data analysis in order to find the risk and return associated with each
alternative options.
Table of Contents
Executive summary...............................................................................................................................1
Introduction...........................................................................................................................................1
Relation between the risk and return theory........................................................................................1
Importance toward the investment decision........................................................................................2
Here are the best investment option in Fiji to invest either for short term or for long term................4
Analysis of Securities of Locate two companies based on the last 8 years data....................................6
Conclusion.............................................................................................................................................7

Introduction
Investment, does means to allocate the money in various alternative investment
options with the intention to received appreciation on invested amounts. A term
investment is also use with refers to acquisition of assets with the objective to achieve
the goal of appreciation in invested amounts either in short run or in long run. The
investment decision is affected by the tenure of investment, the instrument of
investment, the nature and other factors. Investment in stock of any listed or unlisted
company, bounds, immovable property are the some illustration of investment
options. Here the investments are divided into two groups, such as fixed income
generating investment option, such as bounds, fixed deposit, preference shares etc.
while on another hand the variable income generating options are equity shares,
immovable property, and other similar securities.
Relation between the risk and return theory
Any investment option which through high risk, will also give a high return, the return
on investment and the risk are moves in same direction, higher the risk, high
probability or possibility for return. Similarly lower the risk, low possibility of
incomes. So the level of return is highly influence by the facts of risk associated with
the investment options. Now here question is that what does mean by term risk, the
risk refers to all those possibility which vary the expected return of invested amounts.
Importance toward the investment decision
The investment decision is always importance, in term of security, surety, assurance
and safety of invested amounts. Peoples invested their hard earn money with objective
to secured its one or more future long term goals and objectives. If we are thinking for
investment from the single individual investors points of view, whose income are
stable and he/she is in position to save nominal amount of her earning. Then for such
type of investors, investing in secured and stable income generating option are the best
investment option. Such types of investors always believes in making investment in
fixed deposit, government bound and other similar type of secured investment option.
But in another case, where the investors are in position to save the huge amount of
their incomes and or he/she is in position to take a risk, then the variable income
generating instrument with the best combination risk free and risky investment option
is best ways to make investment. The high risk bearing investors believer in
formulating an investment strategy with objective to maximise their wealth both in
short run as well as in long run.

Following factors that need to be consider before selecting any investment option.
A) Investors ability to take a risk
B) The amount available with investors to invest
C) Term for investment
D) The current government tax policy for various investment instruments
E) The saving habits among the investors groups
F) The investment regulation in particular countries
G) The investment option available with investors.
A) Ability to take risk
If an investors is in position or is ready to take a high risk than the possibility to earn
return is comparatively higher than those investors who believes in taking moderate or
low risk. The inventor’s intention to take a risk is a key factors which influence the
investment decision. So the investment strategy is firstly influence by the facts of
intention of investors to take a risk or the ability to take a risk.( Anon (2019).
B) Free capital
You cannot take an investment decision by borrowing a fund, unless your goal is to
start a new venture or to make a capital investment for expansion or modernisation of
business. An investor invest their free fund after formulating a smart investment
strategy That mean decision of investment is also influence or affected by the facts of
available free funds. But in case of corporate or business communities, their decision
for investment of fund in the capital projected is supported either from free funds
available with the company or borrowed a capital from the bake or financial institutes.
C) Tenure for investment
The third important factors which influence the investment decision is a tenure or term
for which investment is made, if the intention of investment is to make investment for
short period of time, than we have to select the most liquid investment option or those
investment option which can be easily liquidated. While on another case where the
intention for investment was to make investment for long term than we can select
those investment option which appreciate invested amounts in long term. So the
decision of investment is also affected by the facts of tenure of investment. Further if
the investment is looking to high appreciation in short term than the level of risk is
comparatively high than, but if the investors looking for security and safety with
nominal return than risk level is comparatively low or moderate.
D) Tax policy
The investment decision is affected by the tax policy followed by tax regulators,
basically high tax rate are imposed over the short term high risky investment
instruments as compere to long term moderate or lower risky investment instrument,

so while taking an decision for investment you have to think about the type of tax
policy applicable to the selected investment instruments.
E) Investment regulation in country
As a part of growth and development strategy of nation, government motivates the
investors and corporate groups to develop the area and location which are suffering
from the unemployment, and is still underdeveloped even after the nation had secure
the growth and development. Here the investment decision is influence by the facts of
favourable government policy, facilities offered by the local and central regulators,
various benefits available for particular period of time. So the investment decision is
also affected by the type of regulation prevailing in nation.
The above stated all factor collectively impact over the investment decision, hence it
is essential to consider all these factors collectively, not only at the time of investment
decision but also after the investment are made, such factors impact or influence our
goal to maximise the wealth of our investment. Further these factors are importance
for our investment decision hence it is essential to consider while formulating the risk
management strategy for investment. (Anon (2019).
Analysis of 5 difference investment option in Fiji and analysis of each option in term
of risk and return associated with each option
Here are the best investment option in Fiji to invest
either for short term or for long term
A) Deposits
B) Share and Security
C) Money Market instruments
D) Properties
E) Fixed income generating bound or securities
Analyses of each investment option
Deposits
Deposit, you ca either invest your free found in the bank account or you can lend your
free funds to the any person or group of the person, for specified period of time, such
as for agreed period of time and at the agreed interest rate. Basically this investment
option is used when an investor looking to make investment for the period of less than

one year, and the intention of investors is not to earn a high return on invested
amounts. This investment option has fall under the lower risk investment categories,
similarly the return of this investment instrument is also comparatively lower than
other investment options. This investment option is most suitable for the small
investors who are interested to invest their free fund in secured investment option,
further this option is also suitable for body corporate or business entity who want to
invested their approved fund (Loan Approved by the bank or financial institutes) for
short period. (Parking of fund for short period of time, with objective to reduce the
loss of interest during non-usage period. (Welcome to Investment Fiji. (2019).
Money market instruments
There are numbers of money market instrument, for the short term investment, which
has a maturity date between the 14 days to 365 days. This instrument are most secured
investment option, here are the examples of money market instrument in Fiji.
A) I Treasury Bill ( issued by the Governments
B) I Promissory notes Issued by the statutory Governments
C) I RBF notes issued by the Reserve bank of Fiji and other monetary instruments
Basically this instrument are popularly used by the large institution investors and large
investors groups and less importance are givens to the small investors or retail
individual investors.
The investment option is most secured and safe instruments as compare to other
investment options. This is secured and safe as it was issued by the Central or state
government, as well as this instrument gives comparatively low risk. The instrument
gives the fixed return for specified period of time, so for short term investment this
investment option is best investment option for large investment groups.
Share and securities
Investment in share and securities, is also one of the best alternative option In Fiji.
This investment option gives both opportunity as well as threat to the investors, here
the opportunities are in term of holding the stake in the company as an owner of
company, while the threat is in term of high risk and possibility for loss of invested
amounts. Investing In share and securities gives a return in term form of divided and
capital appreciation in long term. This option is comparatively best as it gives an
opportunities to investors to earn more return in short period of time, but the expected
risk level is comparatively high than other investment options. (Investment options
for you. (2019).
Benefits of investment in share and securities.
A) The holder of security share received a divided income as a part of distribution
of incomes among the holder of security shares.

B) When the company make a profit it may choose an option to pass the profits
among the holders of instruments. Such distribution of income are treated as a
earning for the investors and wealth creating act of the distributing company.
C) While the appreciation on market price of security is known as a capital
appreciation, this is also treated as an income source for the investors.
D) While the risk in case of this option is possibility to loss the invested amount
and or possibility to receive a return which is comparatively lower than the
return received and realised from the other instrument in market.
Fixed income bearing securities
Investment in prefers share, debenture, debt securities, etc. are the fixed income
generating instruments which are similar to the cash investment option except in case
where the investment are made by the investors for the period more than the one year.
This investment option secured the fixed income for the particular period of time,
while risk associated with this investment option is a possibility of bankruptcy or
liquidation of entity where the invested was made. In Fiji the fixed income bearing
securities are the bound issued by the governments and other statutory authorise, in
addition to these the fixed income bearing instrument also include the other public and
price entities who issued invites the public for subscription of fixed income bearing
instruments such as preference share, debenture and others. (Investment options for
you. (2019).
Investment in property
If an investors is looking for investment for longer period of time, than investing in
property is a best investment option. This investment instrument gives a high risk as
well as high return in long term based in the nature of property. If your property is
located into the commercial areas, that the projected return on investment is
comparatively more than others, similar is your invested property is located in non-
commercial areas then the return of investment is comparatively lower than the
property located in commercial areas.
Investment option Risk Level Return level
Deposits Low Low
Money Market instruments Moderate Moderate
Share and Securities High High
Property Moderate Moderate
Fixed income bearing securities Moderate Moderate

Analysis of Securities of Locate two companies based
on the last 8 years data
For analysis purpose we have selected Amalgamated Telecom Holdings Ltd and
Communications (Fiji) Ltd and Fiji listed companies,
Income analyses of ATH
The income statement of ATH, show the investment made by the firm both for the
short term as well as for the long term, here short term investment refers to those
investment where the intention to make investment is less than 1 year, where the long
term investment refers to one where your intention to make investment is more than 1
year. Looking toward the past trend for investment in various instruments. The income
of our selected firm are divided into the two categories., such as income from the sales
of goods and services and second one income from the other source, looking back to
past of dates of our selected firm, after 2014, the income from other source is
aggressively increase with double digit growth rate, as a result of which proponent
investments in other investment option are comparatively high than the past years, our
selected frim had adopted a smart investment strategy as a result of which the
probable risk factors are comparatively lower, here the investment option generates
nearly 20 percentage return over the invested amount, such facts indicates that a major
investment of reporting entities are in equity shares and other risky investment
options. Here the comparatively risk is high which ensure the benefits in term of high
return. (Investment Opportunities in Fiji. (2019).
Risk and Return analysis of Communication of Fiji Limited
The CFL, limited earns comparatively lower retune than the ATH, however the
positive trend in the income from investment were noted but in reality the growth in
the income are comparatively at moderate level, which indicates that a firm is taking
moderate risk and earns a moderate return. While analysis the various investment
option of CFL during the last eight to 10 years, we can judge that the major income of
the invested are fixed in nature which indicates that our selected firm make investment
in fixed income bearing instruments only.
Conclusion
After analysis the importance of investment and after going through the various
investment options of Fiji we are concludes that an investment option is widely
affected by numbers of social and cultrate factors and the investment decision required

continues and conscious afforded to consider various social and cultrate factors where
any of them can be a reason for risk as well as for opportunity of inventors groups.
References
Anon (2019). Retrieved from
https://fijitradela.com/wp-content/uploads/2016/01/guide-to-investing-in-
fiji.pdf
Anon (2019). Retrieved from https://www.rbf.gov.fj/getattachment/6115e53e-
edba-4b89-8fa6-d9be7f3465d5/Identifying-Your-Investment-Objectives-16-
May,-F
Investment Opportunities in Fiji. (2019). Retrieved from
https://fijihighcom.com/investment-opportunities-in-fiji
Investment options for you. (2019). Retrieved from
https://fijisun.com.fj/2012/07/09/investment-options-for-you/
Welcome to Investment Fiji. (2019). Retrieved from
http://www.investmentfiji.org.fj/