Foreign Stock Performance Analysis

This assignment analyzes the performance of foreign stocks, specifically focusing on how currency exchange rates impact their share prices. It examines two case studies: a company based in New Zealand (FBL) and another European company (James Hardie Industries plc). The analysis utilizes historical currency data to evaluate the relationship between exchange rate fluctuations and stock returns, considering factors such as the NZD-AUD and EUR-AUD pairings. The goal is to determine whether currency movements significantly influence the performance of these foreign companies.

Running head: INTERNATIONAL FINANCE
International Finance
Name of the Student:
Name of the University:
Authors Note:

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Table of Contents
1.a Detecting the changes in percentage of stock on weekly basis:...........................................2
1.b Evaluating the performance of portfolio with other students:.............................................6
2. Stating whether the performance of each Australian based MNC is driven by Australian
Market:.......................................................................................................................................7
3.a Identifying whether performance of foreign stock is in correspondence with the market
value where it is based:..............................................................................................................8
3.b Understanding whether the foreign stock prices are highly correlated:.............................10
3.c Identifying whether performance of foreign stock is better than Australian stock:...........10
4.a Depicting the impact of foreign currency in return generation capacity of Australian based
MNC’s:.....................................................................................................................................12
4.b Depicting the impact of foreign currency in return generation capacity of Australian based
MNC’s:.....................................................................................................................................13
5.a Identifying whether stock performance of each foreign companies is influenced by
exchange rate of local currency with Australian currency:......................................................14
5.b Determining performance of foreign stock:.......................................................................15
Reference and Bibliography:....................................................................................................16

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1.a Detecting the changes in percentage of stock on weekly basis:
Week 1 (10-November-2017)
Name of the
company
Stock price at
end of the week
Percentage change
in stock price
Primary reason
Medibank Private
Ltd
3.16 0.00% No news related to the stock
TPG Telecom Ltd 5.92 0.00% Building heavily to build
business for long-term profit
James Hardie
Industries plc
20.76 0.00% Announcement of offering
for senior notes
Fletcher Building
Limited
6.32 0.00% No relevant news provided
in the index
Week 2 (17-November-2017)
Name of the
company
Stock price at
end of the week
Percentage change
in stock price
Primary reason
Medibank Private
Ltd
3.22 1.90% Announcement of deal with
Kogan
TPG Telecom Ltd 5.8 -2.03% Decline due to market trend
James Hardie
Industries plc
21.14 1.83% Announcement of offering
for senior notes
Fletcher Building
Limited
6.3 -0.32% Decline due to market trend
Week 3 (24-November-2017)

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Name of the
company
Stock price at
end of the week
Percentage change
in stock price
Primary reason
Medibank Private
Ltd
3.19 -0.93% Due to overall market
performance
TPG Telecom Ltd 5.74 -1.03% Decline due to market trend
James Hardie
Industries plc
21.41 1.28% Due to market trend
Fletcher Building
Limited
6.2 -1.59% Decline due to market trend
Week 4 (1-December-2017)
Name of the
company
Stock price at
end of the week
Percentage change
in stock price
Primary reason
Medibank Private
Ltd
3.24 1.57% Due to overall market
performance
TPG Telecom Ltd 5.8 1.05% Due to market trend
James Hardie
Industries plc
21.54 0.61% Due to market trend
Fletcher Building
Limited
6.36 2.58% Due to market trend
Week 5 (8-December-2017)
Name of the
company
Stock price at
end of the week
Percentage change
in stock price
Primary reason

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Medibank Private
Ltd
3.27 0.93% Due to overall market
performance
TPG Telecom Ltd 6.36 9.66% Due to market trend
James Hardie
Industries plc
21.94 1.86% Due to market trend
Fletcher Building
Limited
6.57 3.30% Due to market trend
Week 6 (15-December-2017)
Name of the
company
Stock price at
end of the week
Percentage change
in stock price
Primary reason
Medibank Private
Ltd
3.26 -0.31% Due to overall market
performance
TPG Telecom Ltd 6.44 1.26% Due to market trend
James Hardie
Industries plc
22 0.27% Due to market trend
Fletcher Building
Limited
6.89 4.87% Due to market trend
Week 7 (5-January-2018)
Name of the
company
Stock price at
end of the week
Percentage change
in stock price
Primary reason
Medibank Private
Ltd
3.24 -0.61% Due to overall market
performance
TPG Telecom Ltd 6.73 4.50% Due to market trend
James Hardie 22.62 2.82% US tax cut to increase

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Industries plc earnings of ASX stocks
Fletcher Building
Limited
7.07 2.61% Due to market trend
Week 8 (12-January-2018)
Name of the
company
Stock price at
end of the week
Percentage change
in stock price
Primary reason
Medibank Private
Ltd
3.19 -1.54% Due to overall market
performance
TPG Telecom Ltd 6.57 -2.38% Due to overall market
performance
James Hardie
Industries plc
21.55 -4.73% Estimation of AUD fall
againt USD
Fletcher Building
Limited
6.97 -1.41% Due to overall market
performance
Week 9 (19-January-2018)
Name of the
company
Stock price at
end of the week
Percentage change
in stock price
Primary reason
Medibank Private
Ltd
3.25 1.88% Due to overall market
performance
TPG Telecom Ltd 6.43 -2.13% Due to overall market
performance
James Hardie
Industries plc
21.45 -0.46% Due to overall market
performance
Fletcher Building 6.89 -1.15% Due to overall market

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Limited performance
Week 10 (26-January-2018)
Name of the
company
Stock price at
end of the week
Percentage change
in stock price
Primary reason
Medibank Private
Ltd
3.31 1.85% Due to overall market
performance
TPG Telecom Ltd 6.28 -2.33% Due to overall market
performance
James Hardie
Industries plc
21.26 -0.89% Due to overall market
performance
Fletcher Building
Limited
6.85 -0.58% Due to overall market
performance
1.b Evaluating the performance of portfolio with other students:
Stock Purchase price Current price Return
Medibank Private Ltd 3.22 3.31 2.80%
TPG Telecom Ltd 5.8 6.28 8.28%
James Hardie Industries plc 21.14 21.26 0.57%
Fletcher Building Limited 6.3 6.85 8.73%
Total Returns from the portfolio 20.37%
The above table mainly represent the overall returns that is provided from the created
portfolio, which is at the levels of 20.37%. This relevant increment in the overall return is

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mainly generated from selection of adequate stock, which is presented in the portfolio. After
the comparison with the portfolio of other students the actual returns were not adequate, as
one of the portfolio provided a return of 171.22%. This extraordinary return provided during
the investment period was mainly due to the changes in industry, which was adopted by the
portfolio. The performance of the portfolio was mainly based on the markets in which the
company is performing, while no specific reason is based on company-specific conditions
(Kim, Maurer and Mitchell 2016).
2. Stating whether the performance of each Australian based MNC is driven by
Australian Market:
Figure 1: Stating the performance of Australian company with ASX
(Source: Au.finance.yahoo.com 2018)
The figure depicts the overall performance of MPL against the ASX market, which
indicates that the company has been outperforming the market and providing higher returns.
The performance of the organisation is relatively in lieu with the market, which indicates the
overall returns that is generated by the organisation. This indicates that the return of 15.33%
is provided by MPL, while the market is generating return of 4.97%.

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Figure 2: Stating the performance of Australian company with ASX
(Source: Au.finance.yahoo.com 2018)
The organisation has performed exponentially in comparison with the Australian
index, which could be identified from the above figure. The company has been outperforming
the market and providing higher returns to the investors (Kotsantonis, Pinney and Serafeim
2016). The evaluation also indicates that the return of 13.7% is provided by TPM, while the
market is only generating a return of 4.97%.
3.a Identifying whether performance of foreign stock is in correspondence with the
market value where it is based:

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Figure 3: Stating the performance of Foreign company in Foreign index
(Source: Au.finance.yahoo.com 2018)
Operating in the New Zealand market, FBU has not performed in accordance with the
index, which is directly reducing the returns provided by the company. This directly indicates
that the share price movement of FBU is not driven by local market, which depicts the overall
reduced return provided by the company.
Figure 4: Stating the performance of Foreign company in Foreign index
(Source: Au.finance.yahoo.com 2018)
The performance of JHX can be identified from the above figure, which depicts that
its performance is divine by the home market. Increment in index value mainly raises the
overall performance of the stock, which could be seen in the figure (Clark 2016). Rising
index value is directly boosting the overall performance of the company and is increasing its
return generation capacity.

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3.b Understanding whether the foreign stock prices are highly correlated:
Figure 5: Detecting correlation of two foreign stock
(Source: Au.finance.yahoo.com 2018)
From the evaluation of above figure both the stocks are identified to be inversely
correlated, where performance increment in one stock value is directly reducing value of
other stock. This indicates that both the stocks are highly inversely correlated, which could be
used by the investors in hedging its portfolio.
3.c Identifying whether performance of foreign stock is better than Australian stock:
Figure 6: Detecting Foreign stock with Australian index

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(Source: Au.finance.yahoo.com 2018)
The evaluation of above figure indicates overall performance of the company, which
is in lieu with the Australian market performance. The stock performance of the company is
mainly conducted due to the incremental value of Australian index, which is driving its prices
high.
Figure 7: Detecting Foreign stock with Australian index
(Source: Au.finance.yahoo.com 2018)
The figure portrays that the return of FBU is not influenced by Australian index, as
the performance of the company can be identified from the above figure. This indicates that
the performance of FBU is not based on Australian index, as the company is not able to
performance adequately, when the market is rising. This indicates that share price of FBU is
not driven by Australian market (Amorosi et al. 2017).

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4.a Depicting the impact of foreign currency in return generation capacity of Australian
based MNC’s:
Figure 8: Evaluating currency exchange of New Zealand dollar with AUD
(Source: Oanda.com 2018)
High volitively is mainly seen from the currency exchange rate of New Zealand and
AUD, where TPG telecoms are conducting operations in both Australia, as well as New
Zealand. In addition, this volatile currency market is not influencing the performance of TPG
Telecom, where decline in overall value is not reducing the return generated by the
organisation.

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4.b Depicting the impact of foreign currency in return generation capacity of Australian
based MNC’s:
Figure 9: Evaluating currency exchange of USD with AUD
(Source: Oanda.com 2018)
The operations of Medibank private ltd is conducted in the basis of USD, where
maximum of the insurance is conducted on travel and adequate USD payments are steered by
the company. However, the changes in USD value has no effect on the overall performance
of Medibank private ltd and has no effect on its share price (Balance 2014).

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5.a Identifying whether stock performance of each foreign companies is influenced by
exchange rate of local currency with Australian currency:
Figure 10: Evaluating currency exchange of New Zealand dollar with AUD
(Source: Oanda.com 2018)
Being situated in New Zealand, FBL’s overall share performance is directly
influenced by the currency fluctuations, where increment in current value has boosted share
price of the company, while decline in currency conversion is negatively affecting its prices.
Therefore, it could be assumed that the currency fluctuations is relatively influence the share
performance of the organisation.