Contemporary Issues in Accounting: Hotel Property Investments Analysis

This report analyzes the share price fluctuations of Hotel Property Investments (HPI), a real estate company, over a two-year period. It investigates the relationship between HPI's share prices and company announcements, news, and market events, applying the efficient market hypothesis to determine if share prices accurately reflect available information. The report examines specific events such as director appointments, company secretary changes, dividend declarations, and executive retirements, and their potential impact on share prices. The analysis uses a chart showing the share price trend of HPI over the past two years and discusses the factors that influence the share price. The conclusion highlights the importance of considering available information when valuing a company's shares and the accuracy of the share valuation in the market.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
Name of the Student:
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Author’s Note:

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CONTEMPORARY ISSUES IN ACCOUNTING
Executive Summary
The discussion which is shown below would be dealing with the relationship which share prices
have with different news and announcement of the business and how the same impacts the
valuation process of the shares. The company which is selected for this assessment is Hotel
Property Investments which is engaged in the business of real estate. On the basis of the
fluctuation of the share prices of the company, analysis can be made whether the prices of shares
responds to company announcements and news or not.

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sTable of Contents
Introduction......................................................................................................................................3
Analysis...........................................................................................................................................3
Share Price Reaction to Different Sources......................................................................................5
Analysis of the share Price of Hotel Property Investments for Two Years Period.........................5
Conclusion.......................................................................................................................................7
Reference.........................................................................................................................................8

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Introduction
The main purpose of the assessment is to analyse the business of Hotel Property
Investments which is engaged in the business of offering propriety on lessees and the business is
also known to operate in the real estate business. The assessment would be analysing the
movement in share price of the business with respect to certain major changes in the
organizations (Hpitrust.com.au. 2019). The shares prices of the business are also affected by
certain news which may be of any sort and the same proves that the efficient market theory
hypothesis where the investors are quite knowledgeable and even minor information can impact
the share price of the business. The hypothesis also states that the share price would be correctly
presented if it is sensitive enough to respond to even minor changes. The discussion would only
be reflecting the evaluation of the fluctuation in the shares prices of the business of Hotel
Property Investments due to significant events which takes place in the business.
Analysis

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Figure 1: Share price trend of Hotel Property Investments for the past 2 years
(Source: Finance.yahoo.com 2019)
The above chart shows the fluctuation in the shares prices of the business of Hotel
Property Investments for the past two years and the trend shows an upward increase in the share
prices of the business which is a positive sign for the management of the company. The increase
in the share prices of the business can be seen mainly from the month of January 2019. It is from
this point forward that there has been an upward trend in the share prices of the business which is
a positive sign for the business (Finance.yahoo.com. 2019). The analysis also shows that the
share prices of the business responds to certain news regarding the company and this further
shows that the movement in the share prices of the business is in compliance with efficient
market hypothesis theory. Therefore, it can be estimated that there is a correct valuation of the
share prices of the business in the market. It also signifies that the investors also need to consider
such information before making any investments in the business.

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Share Price Reaction to Different Sources
The share prices of a business can be affected by different factors and events which
depends on the nature of the business. It is a known fact that the information which is released by
a business can also impact the share prices of the business and such can lead to an either increase
or decrease in the share prices (Roca 2018). Some of the major announcements which can affect
the share prices of a business includes resignation of a director or a senior executive, merger or
acquisition which is made by the business, industry wide changes or even a new regulation
which is applicable to the business. In addition to this, there are also certain external events
which can have an impact of the share prices of the company irrespective whether the event is
related to the company or not. Therefore, such information which can affect the share prices of
the business of Hotel Property Investments needs to be considered.
Analysis of the share Price of Hotel Property Investments for Two Years Period
The chart which is shown in figure 1 shows that the share prices of the business
significantly fluctuates from the year 2019 towards an upward trend. However, it can also be
noticed that the there is significant fluctuations in the share prices. In order to make effective
comparison between the changes in the share prices between the two years, important
announcements and events needs to be adhered. The comparison would also reveal as to which
new can affect the shares prices most. Some of the information from the year 2017 which might
have affected the share price of Hotel Property Investments are listed below in details:
Appointment of a Director and Chief Financial Officier: On 27/03/2017, the management of
the Hotel Property Investments decided to appoint a new director to handle the responsibilities of
the one who is retiring. The business is appointing Ms Giselle Collins as an independent Non-

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Executive director so that she can share her expertise in managing the operations of the business.
The Chief Financial officer plays a vital role in managing the finances of the business and the
person who is appointed for the role is very experienced which would contribute to the increase
in the share price of the business. The newly appointed director has vast experience and has
handled similar designation in past for prestigious companies which makes the director very
useful. This news would attract more shareholders as they would be expecting some returns for
their investments. Therefore, the management of the company can anticipate an increase in the
share prices due to the appointment of the new director for the business.
Appointment and resignations of Company Secretary: On 19/05/2017, the company secretary
of the business Mr David Charles has retired from the operations of the business and in his place
Mr Blair Strik has been appointed as the company secretary of the business. This also means that
there would a change in the legal environment of the business would also affect the share prices
of the business most probably causing the same to fall.
Dividend Declaration: The business has made dividend declaration on 23/06/2017 which is
basically profits of the business being shared with the stakeholders of the company (Asx.com.au.
2011). It is quite natural that there would be slight increase in the share price of the business due
to anticipation of better profits in the long run.
Retirement of Managing Director & Chief Executive Officer : On 21/11.2017, the managing
director of the business and the CEO of the business retired who were important part of the top
level management of the company and therefore, it can be expected that the share price of the
business would be falling slightly.
The major changes which took place in the year 2018 which can affect the share prices of
the business of Hotel Property Investments are discussed below in point form:

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 Appointment of CEO: On 20/06/2018, a new CEO was appointed by the management of
the company for managing the operations of the business. The new CEO has vast
experience in the field which makes him the suitable candidate. This is therefore the
reason that the share prices of the business might be fluctuating.
 Announcement of Annual Results: On 23/08/2018, the business has announced the
performance of the company during the period and also highlighted the financial results
of the business. The performance of the business in financial terms is moderate but the
same still in the growth phase which would be attracting shareholders for making
investments which would increase the value of share price of the business.
 Dividend Distribution: On 19/12/2018, the business has announced dividends on the
basis of the performance of the business and this would also enhance the share price
which is reflected in the market. Therefore, declaration of dividend would also be
attracting shareholders and therefore the same would result in hike in the share price of
the business.
Conclusion
The above discussion effectively shows that the business of Hotel Property Investments
effectively follows efficient market hypothesis while presenting the valuation of shares. This
means that the value of shares of the business is affected by news or any events which can have
an impact on the business or the market as a whole. The analysis also shows that the share prices
of the business of Hotel Property Investments is fairly represented and the same is accurate.
Therefore, it can be said that the information which is available should also be considered while
valuing the share price of a business.

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Reference
Asx.com.au. (2011). Announcements Search Results. [online] Available at:
https://www.asx.com.au/asx/statistics/announcements.do?
by=asxCode&asxCode=hpi&timeframe=Y&year=2018 [Accessed 14 Aug. 2019].
Finance.yahoo.com. (2019). Yahoo is now part of Oath. [online] Available at:
https://finance.yahoo.com/quote/HPI.AX/chart?p=HPI.AX [Accessed 14 Aug. 2019].
Hpitrust.com.au. (2019). Home | HPI. [online] Available at: https://www.hpitrust.com.au/cms/
[Accessed 14 Aug. 2019].
Roca, E.D., 2018. Price Interdependence Among Equity Markets in the Asia-Pacific Region:
Focus on Australia and ASEAN: Focus on Australia and ASEAN. Routledge.