International Stock Portfolio Analysis: Performance and Insights

This international finance project involves creating and analyzing a stock portfolio consisting of two Australian multinational corporations (BHP Billiton and Qantas Airways) and two foreign stocks traded on the ASX (CYBG PLC and IRON MOUNTAIN INCORPORATED). The project monitors the portfolio's performance over eight weeks, examining the percentage change in stock prices and the primary reasons behind these fluctuations. The analysis compares the performance of individual stocks against market indices like the ASX 200 and FTSE 100, assessing the impact of local and international market conditions. Furthermore, the project investigates the influence of foreign currency exchange rates, particularly the USD/AUD and GBP/AUD rates, on the stock prices of BHP Billiton, Qantas, and CYBG. The report concludes by interpreting the correlation between these factors and the overall portfolio performance, providing insights into the drivers of stock valuations in the global market.

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)
BHP Billiton Limited BHP.AX $10,000.00 27.12
Qantas Airways Limited QAN.AX $10,000.00 5.89
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)
CYBG PLC UK CYB.AX $10,000.00 5.43
IRON MOUNTAIN
INCORPORATED
USA INM.AX $10,000.00 53.63
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
BHP Billiton Limited 27.97 3.13%
BHP Billiton reported positive
financial results for the year 2017,
which caused increase in share price
(Yahoo finance, 2018).
Qantas Airways Limited 5.57 -5.43%
The company reported lower net
income in the year 2017, which
caused the stock to fall down
(Yahoo finance, 2018).
CYBG PLC 5.5 1.29%
The company is incurring losses,
but the stock price has shown a
positive move which appears to be
due to apprehensions of investors
about the good performance in
future (Yahoo finance, 2018).
IRON MOUNTAIN
INCORPORATED 54.43 1.49%
The financial performance of
company has not been good. The
increase in stock’s price seems to be
short term speculation effect.
3

Portfolio (average) 0.12%
Week-2: 12/01/2017
Name of company
Stock price
at end
of the week
Percentag
e change
in
stock price Primary reason
BHP Billiton Limited 27.58 -1.39%
However, the financial performance
is improving, but the mining
industry in Australia is still in slack.
The move in price in this week
seems to be due to change in the
investor’s apprehensions about the
future of company’s performance.
Qantas Airways Limited 5.71 2.51%
Repositioning in the index funds
made stock price of the company to
rise (Financial Review, 2018).
CYBG PLC 5.73 4.18%
The recent reforms in banking and
finance sector in UK are causing
positive impact on the stock.
IRON MOUNTAIN
INCORPORATED 54.12 -0.57%
Weak financial performance has
shown its impact on the stock price
in this week.
4

Portfolio (average) 1.18%
Week-3: 12/08/2017
Name of company
Stock price
at end
of the week
Percentag
e change
in
stock price Primary reason
BHP Billiton Limited 27.17 -1.49%
The fear in investors due to downfall
in mining industry is causing
decrease in stock price.
Qantas Airways Limited 5.34 -6.48%
There was news in the market that
the company may face slow growth.
This bad news caused stock to slope
down (Woodhouse, 2017).
CYBG PLC 5.76 0.52% Short term speculative effect
IRON MOUNTAIN
INCORPORATED 53.14 -1.81%
The company is facing severe cash
shortfall which is the main reason
for decease in volume.
Portfolio (average) -2.31%
Week-4: 12/15/2017
Name of company
Stock price
at end
Percentag
e change
Primary reason
5

of the week
in
stock price
BHP Billiton Limited 27.71 1.99%
Despite mining industry being on
downfall, stock picked up a rise.
This seems to be due to large scale
operations and strong image of
company.
Qantas Airways Limited 5.06 -5.24%
The decreasing trend continued from
the last week.
CYBG PLC 5.66 -1.74%
Volatility in the banking sector in
UK
IRON MOUNTAIN
INCORPORATED 49.74 -6.40%
The company announced buy out of
IO Data for $1.32 billion. The
investors do not expect this buy out
to change the financial performance
of the company (Chang, 2018).
Portfolio (average) -2.85%
Week-5: 12/22/2017
Name of company
Stock price
at end
of the week
Percentag
e change
in
stock price Primary reason
6

BHP Billiton Limited 29.1 5.02%
The company resuming its off sites
which is causing positive impact on
the stock.
Qantas Airways Limited 5.19 2.57% Speculative short terms effect
CYBG PLC 5.8 2.47% Speculative short terms effect
IRON MOUNTAIN
INCORPORATED 48.02 -3.46% Continued from the last week
Portfolio (average) 1.65%
Week-6: 12/29/2017
Name of company
Stock price
at end
of the week
Percentag
e change
in
stock price Primary reason
BHP Billiton Limited 29.57 1.62% Continued from the last week
Qantas Airways Limited 5.04 -2.89% Overall aviation industry downfall
CYBG PLC 5.79 -0.17% Speculative short terms effect
IRON MOUNTAIN
INCORPORATED 48.51 1.02% Speculative short terms effect
Portfolio (average) -0.11%
Week-7: 01/05/2017
Name of company
Stock price Percentag
Primary reason
7

at end
of the week
e change
in
stock price
BHP Billiton Limited 30.58 3.42% Continued from the last week
Qantas Airways Limited 4.89 -2.98% Overall aviation industry downfall
CYBG PLC 5.64 -2.59%
Volatile Banking and finance
industry in the UK
IRON MOUNTAIN
INCORPORATED 47.31 -2.47% Speculative short terms effect
Portfolio (average) -1.16%
Week-8: 01/12/2017
Name of company
Stock price
at end
of the week
Percentag
e change
in
stock price Primary reason
BHP Billiton Limited 31.53 3.11%
The mining operations of the
company picking pace now. It seems
that the investors expecting
improvement in the financial
performance (Surran, 2018).
Qantas Airways Limited 5.03 2.86% Speculative short terms effect
CYBG PLC 5.56 -1.42% Volatile Banking and finance
8

industry in the UK
IRON MOUNTAIN
INCORPORATED 46.18 -2.39% Speculative short terms effect
Portfolio (average) 0.54%
Requirement-1b
My portfolio comprises four stocks which have been taken from different industries such
as mining, aviation, etc. In the first week, my portfolio earned 0.12% which is lower than the
return earned by some of the portfolios of other students. However, my portfolio hit back with
the outstanding return of 1.18% in the second week. In this week, my portfolio performed better
than others and the main reason for this outstanding performance was diversification of my
portfolio. In the third and fourth week, my portfolio incurred losses with the negative return of -
2.31% and -2.85% respectively. The other portfolios of the class also incurred losses in these
weeks. In the last week, my portfolio ended up with 0.54% return which was better than most of
the other portfolios in the class.
Requirement-2
BHP Billiton Vs ASX 200
9

Figure 1: BHP Billiton Vs ASX 200
From the chart presented above, it could be observed that there the trend in BHP’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 BHP’s stock is still
affected by the moves in the market index (ASX 200) but the stock has capacity to play on its
own that is without waiting from the market to move.
Qantas Airways Limited Vs ASX 200
10

Figure 2: Qantas Airways Limited Vs ASX 200
From the chart presented above, it could be observed that the stock is moving upward and
downward without the market index moving in the same direction. In the month of July, stock
moved upward but the market was stagnant with minor upside movement. Further, in the month
of December, the stock went down, 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
CYBG PLC Vs FTSE 100
11

Figure 3: CYBG PLC Vs FTSE 100
It could be observed that the stock’s price went down in the month of August with overall
market being down in the UK as shown by the downward 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. The continued
with ups and downs in tandem with FTSE 100 till the month of December. This shows that the
market price of the stock is driven to a large extent by the local market conditions in the UK.
Iron Mountain Incorporated Vs FTSE 100
12