Portfolio Performance and Foreign Stock Analysis Report

This report presents an in-depth analysis of a financial portfolio's performance, examining the relationships between individual stock performances and the ASX. The analysis includes a detailed assessment of the portfolio's return, comparing it to market benchmarks and other students' portfolios. It investigates the correlation between stock movements and the ASX, focusing on companies like Begga Cheese and Beach Energy Limited. Furthermore, the report explores foreign stock performance, including Air New Zealand and AirXpanders, examining their price movements, correlation with each other, and their relationship with the ASX. It also investigates the impact of foreign exchange rates on the stock prices of Australian companies and the relationship between foreign company stock prices and their respective national currencies in AUD. The report includes tables, figures, and references to support the findings, providing a comprehensive overview of the portfolio's dynamics and market influences.

INVESTIGATION

TABLE OF CONTENTS
(1).....................................................................................................................................................1
(a) Performance of portfolio........................................................................................................1
(b) Comment on performance of portfolio relative to other students..........................................1
(2) Relationship between stock performnace and ASX...................................................................1
(3)Foreign stock analysis.................................................................................................................2
(a)Stock price movements and change in index value.................................................................2
(b) Relationship between foreign stocks return...........................................................................4
© Relationship between foreign stocks and ASX.......................................................................5
(4)Relationship of Australian companies stock price performance with foreign exchange rate.....5
(5) Relationshio between foreign company stock price and there nation currency in AUD...........6
REFERENCES................................................................................................................................7
APPENDIX......................................................................................................................................8
Figure 1ASX and stocks performance.............................................................................................2
Figure 2AirNewzealand and index performance.............................................................................3
Figure 3AirXpanders and index performance.................................................................................3
Figure 4Foreign companies stocks performnace.............................................................................4
Figure 5ASX and Australia firms stocks performance....................................................................5

(1)
(a) Performance of portfolio
Attached in appendix
(b) Comment on performance of portfolio relative to other students
It is expected that relative to other students portfolio give good performance because
overall it generate return of 4% which is higher then same of market which is -0.1%. Market
conditions and company conditions both are responsible for stock performance. However, if both
are compared then it can be said that it is the company condition which give boost to firms share
price in the portfolio. It can be observed that Beach energy ltd shares performed extremely well
because price of crude oil increase in the market which create positive sentiments among
investors. All these things lead to huge price plunge in firm shares. Begga Chesse to some extent
perform well but some of factors like decline in export impede its stock growth rate in the
market. However, hope of investors that acquisition deal will benefit company lead to rapid
increase in company shares in 2017. Hence, company condition again lead to elevation in
company stock performance. Air Newzealand perform moderaely but due to some operational
problems it loose investors confidence and this lead to decline in stock performace. Hence,
companies performance were major reason behind strong portfolio performance.
(2) Relationship between stock performnace and ASX
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2728 29 3031 3233 34 35 36 37 38 39 40 41 42 43
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Chart Title
Begga Cheese Beach Energy Limited (BPT.AX) ASX
Figure 1ASX and stocks performance
1 | P a g e

Interpretation
There is coorelation between both companies stocks which are Begga Chesse and Beach
Energy Limited and ASX performance. It can be said that in same line both companies stocks are
moving. However, intensity of movement of stocks of Begga Chesse and Beach Energy Limited
is not same if compared with ASX and this reflect that both index and companies stocks are
moving in same direction but magnitude of movement is not similar in case of these variables.
This thing is proved from the fact that value of coorelation between Begga Chesse and ASX is
0.02 which is very low and it can be said that coorelation value is just nearby to 0 and both
variables move in same direction but in terms of percentage change in single day any moderate
coorelation is not observed between both of them. On other hand, in case of ASX and Beach
energy limited coorelation value is 0.10 which is less then 0.50 and again indicate that there is
low coorelation between stock and index in terms of movement. However, both variables move
in same direction but at different magnitude. Thus, it can be said that both companies stocks and
index are not highly related to each other.
(3)Foreign stock analysis
(a)Stock price movements and change in index value
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
Chart Title
AirNewzealand NZX
Figure 2AirNewzealand and index performance
2 | P a g e

1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
Chart Title
AirXpanders NYSE
Figure 3AirXpanders and index performance
Interpretation
To some extent Air Newzealand stocks are negatively coorelated to each other as it can
be observed that manytimes if index value increased then in that case stock price declined.
However, many times index and stock are moving in same direction and at same rate (Kaustia
and Knüpfer, 2012). Correlation value is -0.08 which is indicating that index and stock to some
extent are negatively related to each other. Hence, both are moving to some extent in opposite
direction.
On other hand, in case of AirXpander and NYSE it can be seen that stock is highly
violatile in nature and index is moving at constant rate. Coorelation value is -0.30 which is
indicating that index and company shares are negatively related to each other. Means that if
index is moving upward then stock price declined by certain percentage.
3 | P a g e

(b) Relationship between foreign stocks return
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
Chart Title
AirNewzealand AirXpanders
Figure 4Foreign companies stocks performnace
Coorelation (AXP and AIZ) -0.30
Coorelation value is -0.30 which reflect that both stocks are negatively related and in case
in portfolio if stock of AXP generate positive return then same of AIZ generate negative return
for investors.
4 | P a g e

© Relationship between foreign stocks and ASX
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2728 29 3031 3233 34 35 36 37 38 39 40 41 42 43
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Chart Title
Begga Cheese Beach Energy Limited (BPT.AX) ASX
Figure 5ASX and Australia firms stocks performance
Chart is reflecting that both firms stocks are not highly coorelated to ASX as coorelation
value is 0.00 and 0.05 for both firms with ASX. Hence, it can be said that there almost no
relationship of companies stocks with movement of ASX.
(4)Relationship of Australian companies stock price performance with foreign
exchange rate
It can be observed that Begga Cheese have perfect coorelation with Saudi Riyal currency
and if that currency value will increase in market price of firm shares will also increase. This is
because firm make majority of exports in Saudi Arabia and remaining in other Arabic countries
(Asongu, 2012). Hence, if value of Saudi currency decline its economy can derail. Hence,
growth of company stock is highly coorelated to growth of Saudi currency. In case of Beach
energy limited coorelation value is 0.48 with Newzeland currency. Coorelation is moderate with
mentioned currency because firm perform majority of operations in Australia and few of
operations from New Zealand. Hence, its currency is less exposed to that nation currency
exchange rate. Thus, it can be said if New Zealand currency value increase then it will lead to
moderate appreciation in share value of the firm.
5 | P a g e

(5) Relationshio between foreign company stock price and there nation
currency in AUD
Coorelation table is reflecting that in case of Air NewZealand coorleaiton is negative -
0.00 or no coorelation. This means that stock price performance of mentioned firm have no
relation to Air NewZealand local currency because firm is operating its services in multiple
nations and receive cash from customers in multiple currencies (Filis, Degiannakis and Floros,
2011). Hence, single currency can not affect its entire performance. In case of Air Expander
coorelation value is only 0.15 which is very low and on this basis it can be said that with change
in USD and AUD exchange rate little variation will come in stock price of firm listed in ASX.
This is because USD most of times remain strong in the market and due to this reason currency
fluctuation does not have huge impact on firm shares listed in ASX.
6 | P a g e

REFERENCES
Books and journals
Asongu, S.A., 2012. Government quality determinants of stock market performance in African
countries. Journal of African Business. 13(3). pp.183-199.
Filis, G., Degiannakis, S. and Floros, C., 2011. Dynamic correlation between stock market and
oil prices: The case of oil-importing and oil-exporting countries. International Review of
Financial Analysis. 20(3). pp.152-164.
Kaustia, M. and Knüpfer, S., 2012. Peer performance and stock market entry. Journal of
Financial Economics. 104(2). pp.321-338.
7 | P a g e

APPENDIX
Week 1
Name of
company
Stock
price at
end of
week
Percentage
change in
stock price Primary reason
W
ei
gh
t
Begga
Cheese 7.4 1.23%
Stock performed well in previous months and
due to optimistic perception investors
consistently make investment in firm shares
0.
25
Beach
Energy
Limited
(BPT.AX) 1.065 -6.58%
Energy index does not perform well and decline
sharply which lead to decline in share price of
mentioned company.
0.
25
AirNewzeal
and 2.835 -0.87%
Due to decline in domestic market share price
decline.
0.
25
AirXpander
s 0.7 -2.10%
Investors had less confidence on firm in terms of
profitability.
0.
25
Portfolio
average -2%
4.30096878
52144700
%
Week 2
Name of
company
Stock
price at
end of
week
Percentage
change in
stock price Primary reason
W
ei
gh
t
Begga
Cheese 7.34 -1%
Due to high volatility stock price declined by -
1%.
0.
25
Beach
Energy
1.1 4% News of discovery of new reserves lead to 0.
8 | P a g e

Limited
(BPT.AX) plunge of 4% in stock price. 25
AirNewzeal
and 2.9 1%
Load factor increased by 83% as per news
floated by the firm in the market.
0.
25
AirXpander
s 0.695 -2% Same negative perception remain continue.
0.
25
Portfolio
average 0.34%
Week 3
Name of
company
Stock
price at
end of
week
Percentage
change in
stock price Primary reason
W
ei
gh
t
Begga
Cheese 7.8 7%
Begga Chesse was going to aquire Peanut and
due to expansion its business was expected to
achieve high growth rate.
0.
25
Beach
Energy
Limited
(BPT.AX) 1.14 7%
News that comes last week consistently create
positive image of firm among analyst which lead
to increase in share price.
0.
25
AirNewzeal
and 2.88 2%
News about improvement in firm performance
lead to increase in share price
0.
25
AirXpander
s 0.69 0% Same negative perception remain continue.
0.
25
Portfolio
average 3.91%
Week 4
Name of
company
Stock
price at
Percentage
change in
Primary reason W
ei
9 | P a g e

end of
week stock price
gh
t
Begga
Cheese 7.84 -0.38%
News of expectation of consistent increase in
share price motivate investors to book capital
gain and due to sale of shares price declind.
0.
25
Beach
Energy
Limited
(BPT.AX) 1.095 -5%
Investors on baais of technical indicators think
that shares plunge to pick level and may decline.
Hence, shares were sold in the market.
0.
25
AirNewzeal
and 2.95 3%
Investors consistently rely that firm will perform
well and due to this reason stock price increased
by 3%.
0.
25
AirXpander
s 0.69 -1%
Poor performance of stock in past weeks lead to
decline in firm shares.
0.
25
Portfolio
average -0.88%
Week 5
Name of
company
Stock
price at
end of
week
Percentage
change in
stock price Primary reason
W
ei
gh
t
Begga
Cheese 7.44 -4.49% Profit booking remain consistently in the market.
0.
25
Beach
Energy
Limited
(BPT.AX) 1.1 -0.45% Profit booking remain consistently in the market.
0.
25
AirNewzeal
and 3 0.00%
Due to problem in engiene flights were cancelled
due to which investor sale firm shares.
0.
25
AirXpander 0.685 -1.01% Poor performance of stock in past weeks lead to 0.
10 | P a g e