Group International Investing Project

The report provides an analysis of portfolio performance of Woolworths, BHP Group, Oceanagold Corporation and RTG Mining Inc. The report includes graphs and charts representing the comparison between the stock prices of the companies and the Australian market. It also discusses the impact of local currencies on the stock performance of foreign companies. The report provides insights on currency exchange rates and the reasons behind the increase in share prices of the companies.

GROUP INTERNATIONAL INVESTING
PROJECT
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Table of Contents
Question 1..................................................................................................................................4
A.............................................................................................................................................4
B.............................................................................................................................................6
Question 2..................................................................................................................................7
Question 3..................................................................................................................................9
A.............................................................................................................................................9
B...........................................................................................................................................10
C...........................................................................................................................................11
Question 4................................................................................................................................12
A...........................................................................................................................................12
B...........................................................................................................................................13
Question 5................................................................................................................................13
A...........................................................................................................................................13
B...........................................................................................................................................14
References................................................................................................................................16
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List of Figures
Figure 1: Comparison of Woolworths and Australian Market index movement.......................7
Figure 2 Figure representing comparison between BHP Group and Australian market............8
Figure 3: Figure representing comparison between Oceanagold market indices movement and
stock price movements...............................................................................................................9
Figure 4: Figure representing comparison between RTG Mining Company and Australian
market.......................................................................................................................................10
Figure 5: Analysis of Oceanagold Corporation.......................................................................11
Figure 6: Analysis of RTG Mining Inc....................................................................................12
Figure 7: Graph presenting relationship between NZ$ and AU$............................................14
Figure 8 Graph presenting relationship between Peso (PHP) and AU$.................................15
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QUESTION 1
A
Stocks in which investment has been made:
Australia-Based MNC
Name of
Company
Ticker
Symbol
Amount of
Investment
Price per share at purchase (16th
Nov. 2018)
Woolworths
Group Ltd WOW $10000 28.76
BHP Group Ltd BHP $10000 45.82
Foreign stocks (ADRs)
Name of
Company
Ticker
Symbol
Amount of
Investment
Price per share at purchase (16th
Nov. 2018)
Oceanagold
Corporation OCG $10000 3.8
RTG Mining INC. RTG $10000 0.14
Analysis of Portfolio performance
Name of Company
Stock Price at the
end of the week
Percentage
change in
stock price Primary Reason
Woolworths Group
Ltd (WOW. AX) 29.64 3%
The continuous increase in
metric position
BHP Group Ltd 46.62 3%
Strong financial position
Oceanagold
Corporation (OCG.
TO) 4.64 22%
Consistent Profitability
RTG Mining INC.
(RTG.AX) 0.15 7%
Enhancement in direct
investment and conversion
of the loan in Central
Exploration Pty Ltd.
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Woolworths Group Limited runs retail stores (Woolworths Annual Report, 2018). The reason
behind the effectiveness of Woolworths is its competitive position. It has diverse income
sources. In addition to this, the metric performance of the company is increasing
continuously. The firm has a constant track record of development. BHP Group Limited is a
global resources company. It manufactures different commodities, comprising iron ore,
copper, uranium and metallurgical coal (BHP Group Ltd. Annual Report, 2018). Further, it
sells its products by contracting directly with its consumers. Recently, it is observed that the
price of shares of the company has risen due to a strong financial position. It is to be
considered that the iron ore is one of the most significant commodities of the company, rise
in price is good for earning of the firm. The BHP Company has higher EBITA margins in its
peer group. Due to the same the less debt and certifies that the in future it may acquire other
firms. The bright future perspective is the reason behind the increase in share price.
Furthermore, RTG Mining Inc explores and produces mineral properties. It explores for
copper, magnetite deposits and gold. The reason behind the increase in share price is direct
investment and conversion of the loan in Central Exploration Pty Ltd which has increased its
interest in the company to 24%. The same has been proven as a big win for the company as it
enhanced the massive potential of Panguna copper and gold mine in Bougainville which has a
central interest in it. OceanaGold Corporation explores, develops and deals with the activities
related to gold mining. Apart from this, the profit of Oceanagold is constantly increasing.
Due to the same the company is developing its operations. It is determined that the past
performance of all the four companies is good due to which these are selected for the
investment.
B
Subsequent to estimate the change in the price of all four companies it can be assessed
positive returns have been attained in all the stocks. Hence, the business conditions have a
major impact on the enhancement in an increase in share price of all the four companies. The
portfolio is performing well as it can be accessed that positive returns have been attained in
all the invested stock. The companies have performed well due to a company-specific
condition in a significant manner. However in case of BHP Group market has been in favour
of the company due to which additional benefit has been attained through same due to bright
future perspective. At the same time, the market conditions had also played a significant role
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in accelerating the growth of firms as it has collaborated with the effectiveness of the
individual company.
QUESTION 2
Figure 1: Comparison of Woolworths and Australian Market index movement.
(Source: Woolworths Group Ltd. Summary, 2019)
From the above figure, it can be observed that the company is performing very well in
comparison to the Australian market. Due to the effectiveness of the company the graph is
increasing continuously as well as the returns rate is also higher in comparison to market
indices.
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Figure 2 Figure representing a comparison between BHP Group and Australian market
(Source: BHP Group Ltd, 2019)
With the assistance of the above figure, it is determined that the efficiency of the company is
constantly increasing and the company is operating effectively in the market. Due to the
same, the graph of the company is high in comparison to the Australian market which
represents that the market index is lower in comparison to the return rate of BHP Group.
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QUESTION 3
A
Figure 3: Figure representing a comparison between Oceanagold market indices movement
and stock price movements
(Source: Oceanagold Corporation, Summary, 2019)
Taking into consideration the graph of the company it can be assessed that the market indices,
as well as changes in stock price, have fluctuating trend. The reason behind the same can be
the impact of an external factor which has a significant impact on the market as well as the
company. However, changes in stock price have not driven in corresponding to market as
contradict ups and down can be accessed in the above graph.
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Figure 4: Figure representing a comparison between RTG Mining Company and the
Australian market
((Source: RTG Mining Company, 2019)
The graph of RTG mining company is below the graph of the Australian market. At the same
time, the fact cannot be denied that the firm is trying very hard to increase its efficiency and
its profitability and due to same it has achieved the return rate equal to the existing rate of the
market. However, the contradictory graph lines represent that stock price movement has an
adverse impact due to local market conditions.
B
A negative correlation is represented through a downward sloping line. However, a positive
correlation is a contrast to specifying above (Cornwall, Vang and Hartman, 2016). The stock
price of RTG Mining Inc can be said as correlated in an adequate manner as minor changes in
stock price have been accessed. Correlation is believed as a measure to analyse the historical
relationship between stock prices which is applied in order to take a future decision relating
to stock. The same situation can be accessed in case of OceanaGold Corporation as the
changes in price have been comprising both increases as well as decrease. Thus, it can be
concluded that both the foreign stock prices are highly correlated as both comprise
fluctuating trend in stock prices.
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C
Figure 5: Analysis of Oceanagold Corporation
(Source: Oceanagold Corporation, Summary, 2019)
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Figure 6: Analysis of RTG Mining Inc
(Source: RTG Mining Inc, 2019)
After accessing performance of both the foreign stocks it can be analyzed that in case of
Oceanagold Corporation, foreign stock performance is not driven by Australian market. On
the contrary in case of RTG Mining Inc the company has more or less performed in the
manner Australian market have performed as ups and down in price can be accessed from the
above graph. Overall, it can be concluded that the Australian market has an impact on the
stock price of foreign stocks.
QUESTION 4
A
CURRENCY EXCHANGE RATE
1 NZ $ .94130 AUD
The foreign currency to which Woolworths Group Ltd is most exposed in NZ$ as a major
amount of borrowings comprising Bank loans and Securities (current and noncurrent) are
transacted by the company. A strong relationship exists between both the currencies in terms
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of gold and silver notably. Thus, volatility can be experienced in case deleveraging effect
takes place.
B
CURRENCY EXCHANGE RATE
1 US $ 1.39459 AUD
In the case of BHP Group, the most exposed foreign currency is the US $.The majority of the
Groups debt is issued at fixed interest and in order to convert most of the fixed interest
exposure it has entered into interest rate swaps as well as cross-currency swaps. Both the
currencies are termed as major global currencies as commonly traded at forex market.
However, AUD/USD is the currency which serves as a catalyst for exchange valuation is
gold. But the impact of gold pricing is not the same for both the currencies as it has an
inverse relationship with USD and with AUD it is positively associated.
QUESTION 5
A
Oceanagold Corporation
The stock performance of each of the foreign companies is influenced by the local currency
of the company against the Australian Dollar (Chandra, 2017). As the exchange rate for
Oceanagold Corporation is
CURRENCY EXCHANGE RATE
1 NZ $ .94130 AUD
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Figure 7: Graph presenting a relationship between NZ$ and AU$
(Source: Currency Converter. Historical Exchange Rates, 2019)
It can be assessed that during the investment period AUD $ is falling or decreasing in a
continuous manner which means that market position of Australia is strong and due to same
higher payment would be made by Oceanagold Corporation.
B
RTG Mining Inc.
CURRENCY EXCHANGE RATE
1PESO (PHP) .01674 AUD
13

Figure 8 Graph presenting a relationship between Peso (PHP) and AU$
(Source: Currency Converter. Historical Exchange Rates, 2019)
From the above graph, it can be assessed that foreign company’s local currency is having a
strong position against the Australian dollar. As the increase in currency rate of the
Australian dollar can be analysed from the above analysis.
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REFERENCES
BHP Group Limited (BHP). Summary. (2019). Retrieved from <
https://finance.yahoo.com/quote/BHP/chart %3D>
BHP Group Ltd. Annual Report. (2018). [PDF]. Retrieved from <
https://www.bhp.com/-/media/documents/investors/annual-reports/2018/
bhpannualreport2018.pdf>
Chandra, P., (2017). Investment analysis and portfolio management. McGraw-Hill Education.
Cornwall, J.R., Vang, D.O. & Hartman, J.M., (2016). Entrepreneurial financial
management: An applied approach. Routledge
Currency Converter. Historical Exchange Rates. (2019). [Online]. Retrieved from <
https://www.oanda.com/currency/converter/>
Lydenberg, S., (2016). Integrating systemic risk into modern portfolio theory and
practice. Journal of Applied Corporate Finance, 28(2), pp.56-61.
Oceana Gold Corporation (OGC.TO). Summary. (2019). [Online]. Retrieved from <
https://finance.yahoo.com/quote/OGC.TO/chart %3D%3D>
RTG Mining Inc .Summary. [Online]. (2019). Retrieved from <
https://finance.yahoo.com/quote/RTG.AX/chart %3D>
Woolworths Annual Report. (2018). [PDF]. Retrieved from <
https://www.woolworthsgroup.com.au/icms_docs/195396_annual-report-2018.pdf>
Woolworths Group Ltd. Summary. [Online]. (2019). Retrieved from <
https://finance.yahoo.com/quote/WOW.AX/history?p=WOW.AX&.tsrc=fin-srch>
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