FINA6000: Financial Performance of ANZ and CSL Stocks During Pandemic

This presentation analyzes the financial performance of ANZ (Australia and New Zealand Banking Group Limited) and CSL Limited stocks during the COVID-19 pandemic. It examines the impact of the pandemic on the global financial market, including the free fall of global equity markets and the negative impact on the global economy, such as the loss of GDP. The analysis includes stock data from Yahoo Finance, geometric mean return, risk assessment (systematic and unsystematic risk), and risk-adjusted return using the Sharpe ratio. The presentation provides a qualitative assessment of each stock, including PE ratios and EPS, and concludes with a discussion of the impact on the selected stocks and recommendations based on the financial data. The author also references several academic papers and financial resources to support the analysis.

FINANCE
Name of the student
Name of the University
Author’s Note

Introduction
 WHO, “World Health Organization” 1st acknowledged COVID 19 is a
pandemic all over the world (Sohrabi et al, 2020). .
 Worldwide Economy could contract by approximately 1% in 2020 due
to COVID-19 Pandemic
 A unpredictable reaction in financial market due to COVID 19
Here, we have studied the current market situation, and to analyze
investment opportunity with the risk and return from both the stocks.
Stocks would be ANZ bank and CSL LIMITED

Impact on global financial market
 Global financial market has been much under pressure due to COVID19
 Global equity markets are free fall
 The threats of coronavirus adding with the oil price war, these combined
effect throw the global stock market into a garbage.

Impact on global economy
 COVID 19- negative impact on the global economy
 Loss of GDP at least 2.4% over 2020
 0.4 percent drop in economic growth which lost the economic output
(Kharas, 2017).

Selected Stock
Australia and New Zealand Banking group Limited
Price= 15.52
Market cap= 46.91B
PE ratio= 8.19
EPS= 2.02
Commonwealth Bank
Price= 325.97
Market cap= 147.948B
PE ratio= 73.80
EPS= 4.42
(finance.yahoo.com, 2020)

Stock Data Analysis
 Data collected from Yahoo finance
 Stock code:
ANZ & CSL
 Period- 30-Nov-2019 to 31-Mar-2020

Geometric Mean return
ANZ- 0.995
CSL- 1.001

Risk
Total risk= Systematic risk + Unsystematic risk
ANZ CSL Rm
Systematic risk (β) 0.584 0.973
Unsystematic risk
(STDV) 0.031 0.034 0.026
Total Risk 0.615 1.007

Systematic risk
Market related risk
This types of risk can not be diversified
This risk only can be hedged by using the asset allocation strategy
 βANZ= 0.584
 βCBA= 0.973
β > 1 Aggressive
β < 1 Defensive
Β = 1 At per

Risk adjusted return
Sharp ratio= (return of stock – risk free rate)/STDV
ANZ CSL
Expected return -0.0042 0.0011
Rf 0.000026
Er-Rf -0.00421 0.00105
STDV 0.031 0.03403
Risk adjusted return -13.61% 3.07%

Recommendation
Qualitative factor
ANZ
PE ratio= 8.19
EPS= 2.02
CSL
PE ratio= 73.80
EPS= 4.42

Impact of the selected stock
Stock price has shown 5% down, ANZ and CSL is suffering a
unpredictable movement due to this financial crisis.
For ANZ, the CEO has adopt four critical parts, focused on protecting,
adapting and engaging and preparing for the future.
CSL Limited (ASX: CSL) stock has shown growth moving upwards,

Reference
• Fernandes, N., (2020). Economic effects of coronavirus outbreak (COVID-19) on the world economy. Available at SSRN
3557504.
• Massart, E.M., Hendrickx, J.M. and Absil, P.A., (2015). Approximate matrix geometric means based on the inductive
mean.
• Waemustafa, W. and Sukri, S., (2016). Systematic and unsystematic risk determinants of liquidity risk between Islamic
and conventional banks. International Journal of Economics and Financial Issues, 6(4), pp.1321-1327.
• Sohrabi, C., Alsafi, Z., O’Neill, N., Khan, M., Kerwan, A., Al-Jabir, A., ... & Agha, R. (2020). World Health Organization
declares global emergency: A review of the 2019 novel coronavirus (COVID-19). International Journal of Surgery.
• Feenstra, R. C. (2015). Advanced international trade: theory and evidence. Princeton university press.
• Wilder-Smith, A., Chiew, C. J., & Lee, V. J. (2020). Can we contain the COVID-19 outbreak with the same measures as
for SARS?. The Lancet Infectious Diseases.
• Kharas, H. (2017). The unprecedented expansion of the global middle class: an update.
• Yahoo is now a part of Verizon Media. (2020). Retrieved 13 April 2020, from
https://in.finance.yahoo.com/quote/CBA.AX/community?p=CBA.AX
• Feng, C., Wang, H., Zhang, Y., Han, Y., Liang, Y., & Tu, X. M. (2017). Generalized definition of the geometric mean of a
non negative random variable. Communications in Statistics-Theory and Methods, 46(7), 3614-3620.
• Diris, B., Palm, F., & Schotman, P. (2015). Long-term strategic asset allocation: an out-of-sample evaluation. Management
Science, 61(9), 2185-2202.
• Braun, A., Schmeiser, H., & Schreiber, F. (2018). Return on risk-adjusted capital under Solvency II: Implications for the
asset management of insurance companies. The Geneva Papers on Risk and Insurance-Issues and Practice, 43(3), 456-
472.

Thank You…..