International Finance: Stock Price Changes, Portfolio Performance, and Currency Fluctuations

This document discusses the impact of stock price changes, portfolio performance, and currency fluctuations on international finance. It analyzes the performance of selected companies and their correlation with the Australian market. It also explores the influence of foreign markets and currency fluctuations on share prices, as well as the relationship between currency exchange rates and share prices.

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) Determining the percentage change in stock price and providing primary reason for the
change:.......................................................................................................................................2
1.b) Commenting on the portfolio performance:.......................................................................3
2) Indicating whether the performance of the selected companies is driven by the Australian
market:........................................................................................................................................4
3.a) Indicating whether the performance of the foreign companies is driven by their
corresponding market:................................................................................................................5
3.b) Determining whether foreign stocks are highly correlated:................................................6
3.c) Indicating whether the performance of the foreign companies is driven by the Australian
market:........................................................................................................................................7
4.a) Detecting whether currency fluctuations influence share price of BHP:............................8
4.b) Detecting whether currency fluctuations influence share price of WOW:.........................9
5.a) Detecting whether currency fluctuations influence AIZ share price:.................................9
5.b) Detecting whether currency fluctuations influence AIA share price:...............................10
Reference and Bibliography:....................................................................................................11

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1.a) Determining the percentage change in stock price and providing primary reason
for the change:
Name of the company Closing Stock Price Percentage change Primary reason
BHP Billiton Limited 31.56 -2.47% BHP facing problems from China
Woolworths Group Limited 29.24 1.67% AGM meeting has been held
Air New Zealand Limited 2.85 1.79% Declining oil prices
Auckland International Airport Limited 6.65 -1.92% Board appointment
Name of the company Closing Stock Price Percentage change Primary reason
BHP Billiton Limited 30.69 -2.76% Decline in China iron ore imports
Woolworths Group Limited 28.92 -1.09% Due to market condition
Air New Zealand Limited 2.91 2.11% Declining oil prices
Auckland International Airport Limited 6.68 0.45% Improvement in performance
Name of the company Closing Stock Price Percentage change Primary reason
BHP Billiton Limited 31.18 1.60% BHP Insiders have been buying
Woolworths Group Limited 29.23 1.07% Disclosure from analyst regarding the earnings report
Air New Zealand Limited 2.88 -1.03% Problems in the fundamental report
Auckland International Airport Limited 6.89 3.14% Welcomming new Tahitian Dreamliner
Name of the company Closing Stock Price Percentage change Primary reason
BHP Billiton Limited 32.40 3.91% Disclosure high dividends
Woolworths Group Limited 28.31 -3.15% Outraged customers to boycott Woolworths
Air New Zealand Limited 2.83 -1.74% Low earnings growth
Auckland International Airport Limited 6.66 -3.34% Major fire incident
Name of the company Closing Stock Price Percentage change Primary reason
BHP Billiton Limited 33.36 2.96% Analyst report that share price will hit $40
Woolworths Group Limited 28.67 1.27% Adoption of new marketing strategy
Air New Zealand Limited 3.01 6.36% Declining oil prices
Auckland International Airport Limited 6.77 1.65% ROE report from analyst
Name of the company Closing Stock Price Percentage change Primary reason
BHP Billiton Limited 33.95 1.77% Goldman still rating BHP as Buy
Woolworths Group Limited 29.55 3.07% Airticle regarding the finanical strength of Woolworths
Air New Zealand Limited 3.00 -0.33% Due to the market
Auckland International Airport Limited 6.80 0.44% Due to the market
Name of the company Closing Stock Price Percentage change Primary reason
BHP Billiton Limited 33.38 -1.68% Iron ore prices is expected to decline
Woolworths Group Limited 29.30 -0.85% New regarding the faulty chicken of Woolworths
Air New Zealand Limited 2.87 -4.33% Due to the market
Auckland International Airport Limited 6.92 1.76% Influenced by the market
Name of the company Closing Stock Price Percentage change Primary reason
BHP Billiton Limited 32.79 -1.77% Share trading ex-dividend for $1.43 per share
Woolworths Group Limited 29.64 1.16% Increasing demand from customers
Air New Zealand Limited 2.99 4.18% Declining oil prices
Auckland International Airport Limited 6.84 -1.16% Due to the market
Week 1 Friday, November 23, 2018
Week 2 Friday, November 30, 2018
Week 3 Friday, December 7, 2018
Week 4 Friday, December 14, 2018
Week 8 Friday, January 11, 2019
Week 5 Friday, December 21, 2018
Week 6 Friday, December 28, 2018
Week 7 Friday, January 4, 2019

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The above figure depicts the overall return of each stock during the period of 8-
weeks, which is derived from relevant news. The share price of the selected organisation is
relevantly influenced by the news that is presented in the market. The price actions have
increased and declined during the 8-week period, which is affecting the share price of the
organisations. Thus, it could be understood that during the short-term period the relevant
news affect the share price of the organisation.
1.b) Commenting on the portfolio performance:
Stock Buying price Current price Return
BHP Billiton Limited 32.36 32.79 1.33%
Woolworths Group Limited 28.76 29.64 3.06%
Air New Zealand Limited 2.80 2.99 6.79%
Auckland International Airport
Limited 6.78 6.84 0.88%
Returns from the portfolio 3.01%
The above tale indicates that the performance of the portfolio has been adequate for
the period of 8 weeks, where the return of 3.01% is derived from investments. In addition, the
increment in the share price of the selected companies has allowed the portfolio to improve
the level of income from investment. The maximum returns have been generated from AIZ,
which is mainly at the levels of 6.79%, while the minimum returns are generated from AIA
with a value of 0.88%.

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2) Indicating whether the performance of the selected companies is driven by the
Australian market:
Figure 1: Comparing price movement of BHP with ASX Index
(Source: Au.finance.yahoo.com, 2019)
The share price performance of BHP is detected to move contradictory to the ASX
index, where the increment in share price of the company is complemented by the declining
value of the ASX market. Moreover, when the ASX market has increased in value during
December then the share price of BHP Billiton has declined simultaneously.
Figure 2: Comparing price movement of WOW with ASX Index

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(Source: Au.finance.yahoo.com, 2019)
The share price movement of Woolworth is directly complemented by the ASX index,
where the increment in the value of the market is directly increasing the share price of the
company. Hence, it can be detected that the share price of the organisation is mainly driven
by the ASX market.
3.a) Indicating whether the performance of the foreign companies is driven by their
corresponding market:
Figure 3: Comparing price movement of AIZ with New Zealand Index
(Source: Au.finance.yahoo.com, 2019)
The figure also indicates that the price movement of New Zealand Index directly
influences the share price of AIZ, where increment in the values of the market is raising the
share price of the organisation.

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Figure 4: Comparing price movement of AIA with New Zealand Index
(Source: Au.finance.yahoo.com, 2019)
The figure indicates the New Zealand Index complements the AIA share price
movement, where the increment in the share price is relevantly increasing due to the market
index. The figure directly indicates the positive relation between the share price movement of
the organisation and the market index.
3.b) Determining whether foreign stocks are highly correlated:
Figure 5: Correlation between AIZ and AIA
(Source: Au.finance.yahoo.com, 2019)

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The figure directly indicates that the share price movement of AIZ and AIA is not
highly correlated, as the share price values of the both the companies have been providing
alternative returns. The increment in value of AIZ results in the decline in AIA, which depict
the low correlation between both companies. This low correlation would be an effective
measure for the investors, as they could hedge their exposure in the market.
3.c) Indicating whether the performance of the foreign companies is driven by the
Australian market:
Figure 6: Comparing price movement of AIZ with ASX Index
(Source: Au.finance.yahoo.com, 2019)
The comparison of AIZ and ASX index is relatively conducted in the above figure,
where the price movement of both the components is averse to each other. In addition, the
increment in the share value of AIZ does not raise the ASX index value over the period.

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Figure 7: Comparing price movement of AIA with ASX Index
(Source: Au.finance.yahoo.com, 2019)
The share price of AIA is not driven by the ASX index, as the price movement is
considered averse in nature. Moreover, the figure directly indicates that increment in the
value of ASX index has resulted in the decline in AIA share price.
4.a) Detecting whether currency fluctuations influence share price of BHP:
Figure 8: Currency exchange of USD with AUD
(Source: Oanda.com, 2019)

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The major revenues of the organisation are mainly collected in USD, which is
relevantly converted in AUD. The overall share price of the company has mainly incremented
with the rising values of the USD to AUD. This directly indicated that the income generated
by BHP in USD is influencing its share price values in the ASX market, which can be seen in
the above figure.
4.b) Detecting whether currency fluctuations influence share price of WOW:
The share price value of Woolworths has mainly increased when the values of
USD/AUD has declined over the period. This directly indicates that the currency value of
USD/AUD is not influencing the share price of Woolworths. However, in the international
market the organisation earns in USD, while the currency fluctuation is not affecting its share
price in the ASX market.
5.a) Detecting whether currency fluctuations influence AIZ share price:
Figure 9: Currency exchange New Zealand dollar with AUD
(Source: Oanda.com, 2019)

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The share price of AIZ is influenced by the changing values of New Zealand dollar
with AUD, while increment in the values of the currency is also raising the share price of the
organisation and vice versa. Therefore, from the valuation it can be detected that the share
price of the organisation is minutely influenced by the New Zealand dollar.
5.b) Detecting whether currency fluctuations influence AIA share price:
The operations of the AIA are mainly conducted in New Zealand dollar, which is the
main reason why the share price movement of the organisation is directly influenced by the
currency valuation. Nevertheless, the share price movement has relevantly impact from the
currency valuation, as the increment in currency values is directly results in higher share
value.

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Reference and Bibliography:
Au.finance.yahoo.com. (2019). Au.finance.yahoo.com. Retrieved 13 January 2019, from
https://au.finance.yahoo.com/quote/WOW.AX?p=WOW.AX
Au.finance.yahoo.com. (2019). Au.finance.yahoo.com. Retrieved 13 January 2019, from
https://au.finance.yahoo.com/quote/BHP.AX?p=BHP.AX
Au.finance.yahoo.com. (2019). Au.finance.yahoo.com. Retrieved 13 January 2019, from
https://au.finance.yahoo.com/quote/AIZ.AX?p=AIZ.AX
Au.finance.yahoo.com. (2019). Au.finance.yahoo.com. Retrieved 13 January 2019, from
https://au.finance.yahoo.com/quote/AIA.AX?p=AIA.AX
Au.finance.yahoo.com. (2019). Au.finance.yahoo.com. Retrieved 13 January 2019, from
https://au.finance.yahoo.com/world-indices
Eiteman, D. K., Stonehill, A. I., & Moffett, M. H. (2016). Multinational business finance.
Pearson Higher Ed.
Frieden, J. (2015). Banking on the world: the politics of American international finance.
Routledge.
Oanda.com. (2019). Oanda.com. Retrieved 13 January 2019, from
https://www.oanda.com/fx-for-business/historical-rates?
view=graph&base=USD&quote=EUR&duration=30