Managing Finance: Portfolio Assessment of ASX and Nikkie

This presentation report is based on portfolio assessment of two different securities Australian securities exchange (ASX) and Japan securities exchange (Nikkie). These exchanges has been diversified into two different portfolios which are Australia and Japan. The scenario consists of recommending suitable portfolio options to risk averse investors.

Managing finance

 Introduction
 Task 1
 Task 2
 Task 3
 Task 4
 References
Content

This presentation report is based on portfolio
assessment of two different securities
Australian securities exchange (ASX) and
Japan securities exchange (Nikkie). These
exchanges has been diversified into two
different portfolios which are Australia and
Japan. The scenario consists of
recommending suitable portfolio options to
risk averse investors.
Introduction

Shares market index
A stock exchange index, or stock exchange
index, is a chart that measures the exchange
of securities, or a subset of the stock
exchange, which helps speculators with
different levels of normal value and past
costs to measure performance. It is processed
by the selected stock costs (mathematically
coherent meaning by weight).
Continue…
Task 1

Free-float adjusted Market-Capitalization Weighting shows
the optimal loads from each component’s applications,
especially for intentional or deliberate applications not
commonly found on the open market. Governments,
subsidiaries, entrants and employees may withhold these
offers. Boundaries of foreign property imposed by
government directives may be subject to movement
changes. These changes educate financial experts about
potential liquidity problems from these funds that are not
clear from the sheer number of staggering stock offers.
Free skimming conversions are soft-minded endeavors,
and several file providers have specialized editing
techniques, which can yield a number of results here and
there.

Underperform and over performed shares
Underperform shares: If an investment doesn't work, it
doesn't keep up with the various guarantees. In a
growing industrial sector, for example, stocks do not
meet expectations unless they experience increases
equivalent to or more specific to the development of
the ASX 200 index. A stock that falls faster than the
market is larger than a sub- producer. There is also "If
expectations are not met" an analyst's
recommendation is given to equities when bids are
expected to be slightly worse than market
performance. The ad is called an "average sale" or
"visible catch".
Task 2

Overperform shares: In the financial media,
Overperform is typically used as an
assessment provided by analysts who review
and recommend safeguards. If they change
their rating of a particular stock to
“Outperform” from “Market Performance” or
even “If you don’t meet expectations”
something has changed in their test that will
make them assume that the stock will
produce more important result , for a long
time to come, the important market files

Interpretation: Australian stock exchange index shows
average return of -0.0145%; by comparing this to other
top 5 companies shares, it was found that BHP, CBA, CSL
and RIOP overperformed while WBC under performed by -
0.171% during the period (31st August, 2019 to 31st
March, 2020).
Daily returns of ASX and Nikkie

Interpretation: Japan stock exchange index Nikkie
shows -0.040%; the comparison with other top 5
companies shares shows that 3 companies
(7203, 8432 and 9437) have overperformed the
indices and remaining 2 companies (8306 and
9984) have underperformed the indices.
Daily returns of ASX and Nikkie

 This is due to the fact that the example of
earnings in stock trading is severely reduced,
which means that a relatively small number of
high yield stocks tend to be mostly, or all, of the
arrival of the market.
 The good performance of an equity return occurs,
while the maximum amount a security can lose is
100%, the expected positive returns for a security
are well above 100%. The same thing happens
with numbers, reducing irregular returns, even if
distributed evenly, causing a slow circulation of
profits over time.
Reason for shares underperformed
or over performed the index

 A portfolio is a collection of monetary resources, such as
equities, securities, commodities, cash standards and
liquidity, just like store partners, including shared goods,
closed trading and exchange. A package may also include
non-free trade protections, such as land, work and private
enterprise. Cash accounts use this concept to function
properly.
 The packages are managed directly by speculators and
distributed by money experts and money leaders. Financial
experts should create a business package based on the
strength of risk and associated objectives. Likewise,
financial experts may have different responsibilities for
different purposes. It all depends on a person's goals as a
financial expert.
Task 2

The beta of a portfolio is the total weight of the
individual resource betas, based on the level of
interests in the portfolio. For example, if half of the
available money A with a beta of 2.00 and half of
the available money B with a beta of 1.00, the
beta package is 1.50. The beta pack represents
the instability of two protection packs, taken as a
whole, as assessed by the individual stocks of the
protections that caused it to rise. A beta of 1.05
compared to the ASX 200 suggests that if the ASX
pre-funded yield increases by 10%, the package is
expected to increase by 10.5%.
Beta of portfolio

 Single speculators can determine the
volatility of their records by looking at each
company’s beta and making a general
baseline estimate. Counting is just a matter
of getting a beta for every security and
change as determined by the size of each of
your owners. This is called normal pressure.
 Beta can be tested over different periods.
Stocks can be invisible at this time, but they
are usually stable for several years.
Calculation of Beta value

Calculation the mean return, standard deviation
and beta

Interpretation: Above are the comparison of two
portfolios; Australian (ASX) and Japan (Nikkie). Out
of two second portfolio; which is Nikkie shows
more volatility than portfolio one. Standard
deviation of Japan’s security exchange’s top 5
company’s shares prices is higher than
Australian’s index. It also shows that there’s huge
up and down in the share price of Nikkie’s top
companies market. This makes it risky and highly
speculative; due to higher standard deviation; at
the same time the return opportunity is also
higher in this portfolio compares to Portfolio 1.

Task 3

 Interpretation: The tables above show two
separate portfolios which are Japan and Australian
exchange. The investor is risk averse; which
means only wants to spend money to get secured
profit such as in bonds, debenture and any other
securities. Thus, he has $10 Million dollar to invest
only in one portfolio.
 Recommendation: As the situation demands that
investor wants secured profit; hence in such
circumstances; Portfolio 1 is recommended to
investor for having secured return as compared to
Portfolio 2.

Effect of COVID-19 on bond markets of
Australia
The impact of the Coronavirus novelty has
occurred dramatically on stock exchanges
in the past few weeks, with huge declines,
volatile volatility and rapidly changing
conditions in key markets. This is not typical
of any crisis we have seen in the past few
decades, with improvements of over 5% per
day.
Task 4

Effect of COVID-19 on bond markets of
Japan
The third largest economy in the world is
likely to issue green bonds of between $ 4.5
billion and $ 5.0 billion by 2020, according
to a signal from the UK charity, the Climate
Bond Initiative, or CBI the guidance on
green bands. It will be down from $ 7.2
billion a year ago, the highest number since
2014, when full information opened.

Books and Journals
Phuoc, L.T., Kim, K.S. and Su, Y., 2018. Reexamination of Estimating Beta Coecient as a Risk Measure in CAPM. The
Journal of Asian Finance, Economics, and Business, 5(1), pp.11-16.
Dash, M., 2017. A study on Granger causality in the CAPM. i-Manager's Journal on Management, 11(4), p.61.
Chandra, P., 2017. Investment analysis and portfolio management. McGraw-hill education.
Bredillet, C., Tywoniak, S. and Tootoonchy, M., 2018. Exploring the dynamics of project management office and portfolio
management co-evolution: A routine lens. International journal of project management, 36(1), pp.27-42.
Thakur, R. and Workman, L., 2016. Customer portfolio management (CPM) for improved customer relationship
management (CRM): Are your customers platinum, gold, silver, or bronze?. Journal of Business Research, 69(10),
pp.4095-4102.
Yelamanchili, R.K. and Adavelli, S.R., 2017. Comparative Assessment of Total Return, Risk Adjusted Return, Ranking and
Performance Persistence of Small and Large Cap Mutual Funds. Management and Economic Journal, pp.72-79.
Guo, Y., Zhou, W., Luo, C., Liu, C. and Xiong, H., 2016. Instance-based credit risk assessment for investment decisions in
P2P lending. European Journal of Operational Research, 249(2), pp.417-426.
Kelly, B.T., Pruitt, S. and Su, Y., 2019. Characteristics are covariances: A unified model of risk and return. Journal of
Financial Economics, 134(3), pp.501-524.
Yahoo finance, 2020: Available online through; <
https://finance.yahoo.com/quote/CSL/history?period1=1567209600&period2=1585612800&interval=1d&filter=history&
frequency=1d
>
Financial analyzer, 2020: Available online through; <
https://financialpartnersblog.com.au/all-blogs-list-all-posts/covid-19-update-effect-on-equities-and-bond-markets-amp-c
apital/
>
S&P Global, 2020: Available online through; <
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/japan-green-bond-issuance-in-202
0-may-fall-from-record-high-as-covid-19-rages-59076903
>
References

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