International Finance: Stock Performance and Exchange Rate

This report provides an analysis of the stock performance of several companies, including Rio Tinto, AGL Energy Limited, Universal Coal PLC, and Visioneering Technologies, Inc., within the context of international finance. The analysis covers a period of eight weeks, examining the percentage change in stock prices and the primary reasons behind these changes. The report also investigates the relationship between the stock performance of these companies and the ASX 200 and FTSE 100 indices, as well as the impact of exchange rate fluctuations (USD/AUD and GBP/AUD) on the stock prices. The findings highlight the varying degrees of correlation between stock performance and market indices, and the influence of currency movements on stock values. The report concludes by discussing the implications of these findings for investors and the overall understanding of international financial markets.

International Finance
1

Requirement-1a
List of Stocks
Australia-based MNC
Name of Company Ticker
symbol
Amount of
Investment
Price per share
at
purchase (17
Nov 2017)
RIO TINTO RIO.AX $10,000.00 70.89
AGL Energy Limited AGL.AX $10,000.00 24.93
Foreign stocks (ADRs)
Name of Company Country
where
company
is based
Ticker
symbol
Amount of
Investmen
t
Price
per
share at
purchase
(17 Nov
2017)
UNIVERSAL COAL PLC UK UNV.AX $10,000.00 0.19
VISIONEERING
TECHNOLOGIES, INC.
USA VTI.AX $10,000.00 0.38
2

Week Wise Stock Performance
Week-1: 11/24/2017
Name of company
Stock price
at end
of the week
Percentage
change in
stock price Primary reason
Rio Tinto Limited 72.10 2.82%
Company announces to buy a 32%
share in Saskatchewan Inc. worth
$4.8bn. (Bloomberg, 2017).
AGL Energy Limited 23.90 -4.13%
Negative sentiments towards the
entire energy sector. All stocks
down.
UNIVERSAL COAL PLC 0.19 0.00%
Lack of fluctuation due to majority
private holding
VISIONEERING
TECHNOLOGIES, INC. 0.39 2.63%
Analysts declare double digit
growth for healthcare industry in
2018 (Yahoo Finance, 2017)
Portfolio (average) 0.33%
Week-2: 12/01/2017
Name of company Stock price
at end
of the week
Percentag
e change
in
Primary Reasons
3

stock price
Rio Tinto Limited 71.17 -2.36%
Price down on minor speculation
about changing leadership. Rio
Tinto looking for a new chairman.
AGL Energy Limited 25.22 5.52%
Victorian government has
announced rebates for customers of
AGL Energy. Outcome celebrated
by investors (The Motley Fool,
2018)
UNIVERSAL COAL PLC 0.19 0.00%
Private holding. No external demand
or supply affecting the stock price.
VISIONEERING
TECHNOLOGIES, INC. 0.36 -7.69%
Technology stocks drop on massive
sell off (Financial times, 2017).
Portfolio (average) -1.13%
Week-3: 12/08/2017
Name of company
Stock price
at end
of the week
Percentag
e change
in
stock price Primary Reasons
Rio Tinto Limited 69.20 -2.77%
Iron ore prices fall and remain in a
longer term bear market (Yahoo
Finance, 2017)
4

AGL Energy Limited 25.82 2.38%
Shares high on broker updates
leading to positive sentiments.
UNIVERSAL COAL PLC 0.19 0.00%
Lack of fluctuation due to majority
private holding
VISIONEERING
TECHNOLOGIES, INC. 0.44 22.22%
New director appointed leading to
positive sentiment in the market.
(Biotech Dispatch, 2017).
Portfolio (average) 5.46%
Week-4: 12/15/2017
Name of company
Stock price
at end
of the week
Percentag
e change
in
stock price Primary Reasons
Rio Tinto Limited 70.57 1.98%
Rio Tinto lowers capital spending,
shareholders expect higher returns
(Yahoo Finance, 2017)
AGL Energy Limited 24.52 -5.03%
AGL Energy limited debt to equity
ratio is 45.72%. Signifying the
company’s debt could pose threats.
(Simply Wall street, 2017).
UNIVERSAL COAL PLC 0.19 0.00%
No movement in the industry.
Private holding keeps stock stable.
5

VISIONEERING
TECHNOLOGIES, INC. 0.45 2.27%
Positive sentiments continue after
speech from the new leadership.
Portfolio (average) -0.20%
Week-5: 12/22/2017
Name of company
Stock price
at end
of the week
Percentag
e change
in
stock price
Rio Tinto Limited 74.28 5.26%
Relative strength rating of Rio Tinto
rises from 77 to 81 (Investor’s
business daily, 2017).
AGL Energy Limited 24.39 -0.53%
Minor loss on negative speculations
of investors.
UNIVERSAL COAL PLC 0.19 0.00%
Lack of fluctuation due to majority
private holding
VISIONEERING
TECHNOLOGIES, INC. 0.49 8.89%
Healthcare Biometrics Market
Expected to Reach USD 5.6 billion
by 2022 With VTI as key player
(Herald Keeper, 2017).
Portfolio (average) 3.40%
6

Week-6: 12/29/2017
Name of company
Stock price
at end
of the week
Percentag
e change
in
stock price Primary Reasons
Rio Tinto Limited 75.81 2.06%
Glencore and Apollo bid for coal
mines of Rio Tinto. Rio plans to
diversify its portfolio away from
coal (Bloomberg, 2017).
AGL Energy Limited 24.36 -0.12%
Minor loss on negative speculations
of investors.
UNIVERSAL COAL PLC 0.19 0.00%
Lack of fluctuation due to majority
private holding
VISIONEERING
TECHNOLOGIES, INC. 0.55 12.24%
Positive sentiments from last week
drive growth.
Portfolio (average) 3.55%
Week-7: 01/05/2017
Name of company
Stock price
at end
of the week
Percentag
e change
in
stock price Primary Reasons
Rio Tinto Limited 78.25 3.22% Share value gains on positive
7

sentiment across market.
AGL Energy Limited 24.32 -0.16%
Minor loss on negative speculations
of investors.
UNIVERSAL COAL PLC 0.20 5.26%
Increase in revenues leading to
increased share value
VISIONEERING
TECHNOLOGIES, INC. 0.54 -1.82%
Small sell off. Market relaxing after
two week of buying.
Portfolio (average) 1.62%
Week-8: 01/12/2017
Name of company
Stock price
at end
of the week
Percentag
e change
in
stock price Primary Reasons
Rio Tinto Limited 80.62 3.03%
Speculations on iron ore hitting
$100 in 2018 raises expectations
(Yahoo Finance, 2018)
AGL Energy Limited 24.25 -0.29%
UBS downgrades oil stocks leading
to negative sentiment (Yahoo
Finance, 2018).
UNIVERSAL COAL PLC 0.20 0.00%
Stable earnings per share. Stable
stock. Stable share value.
VISIONEERING 0.54 0.00% Stable market
8

TECHNOLOGIES, INC.
Portfolio (average) 0.69%
Requirement-1b
Requirement-2
RIO TINTO vs. ASX 200
Figure 1: RIO TINTO vs. ASX 200
From the chart presented above, it could be observed that there the trend in RIO’s stock is
largely independent of the trend in ASX 200 (market index). This is due to wide spread business
of the company in many countries across the globe. However, the RIO’s stock is still positively
correlated by the moves in the market index (ASX 200) but the dependence and the relation is
minute.
AGL Energy Limited vs. ASX 200
9

Figure 2: AGL Energy Limited vs. ASX 200
From the chart presented above, it could be observed that the stock is mostly independent
of the index (ASX 200). In the month of April, stock moved upward but the market was stagnant
with minor upside movement. Further, the month of August and September saw a major drop in
the stock, but the market was again stagnant with some minor upside movement. This shows that
the movements in the stock’s price are not purely driven by the Australian stock market.
Requirement-3-a
UNIVERSAL COAL PLC vs. FTSE 100
10

Figure 3: UNIVERSAL COAL PLC vs. FTSE 100
It could be observed that the stock’s price went up in the month of July with overall
market being stagnant as shown by the trend in FTSE 100. From the month of October, the
market conditions started improving as shown by the upward trend in FTSE 100 and with the
improvement in the overall market, the stock also showed rising trend. However the rise in the
stock is much higher than the market (FTSE 100). This shows that the market price of the stock
is not driven to a large extent by the local market conditions in the UK.
VISIONEERING TECHNOLOGIES, INC. vs. FTSE 100
11

Figure 4: VISIONEERING TECHNOLOGIES, INC. vs. FTSE 100
From the month of May to the middle of June, the stock was falling down however FTSE
100 could be seen to be moving slightly upside. In the month of September, the stock showed
downward trend and the FTSE 100 showed declining. However, from October to December, the
stock showed same trend as that shown by FTSE 100 but with a much larger intensity. This
implies that the price of stock is affected to some extent by the local market conditions.
Requirement-3b
UNIVERSAL COAL PLC vs. VISIONEERING TECHNOLOGIES, INC.
12