You’re a group of investment analysts who work for a large investment consulting firm based in Australia. There’s one big institutional investor from overseas that is interested in investing in the Australian market. To win the contract with the said client, you need to write a report to analyse the Australian financial market with applied financial management concepts and practices, which are required by the client.
The client need to get basic information about the market before making financial investment decisions in Australia. Their areas of interest include: Australian financial market structure, availability of financial service and financial information, popular tools of capital budgeting (investment criteria), features of bond market, feature of share market, and potential industries for financial investment. This assignment requires your group to undertake a comprehensive research of Australian financial markets and financial practices to show that your group is the best among the bidders.
1.Create your group’s “business name” under which your group will be providing the financial market consulting;
2.Allocating tasks of the group assignment among your group members;
3.Providing analysis and justification of the 6 specified topics of Australian market as required by your client. Research should be conducted to address each topic. Analysis should be justified by necessary institutional documents, researches, journal articles and other reliable sources of information. Information from the website of Australian Securities and Investment Commission -ASIC
(https://asic.gov.au/), Australian Prudential Regulatory Authority –APRA ( https://www.apra.gov.au/) and Australian Stock Exchange - ASX (www.asx.com.au) and other regulators are strongly recommended. However, citation should be made properly to avoid plagiarism;
4.Compiling a consulting report that summarise your analysis. After completion of your analysis, you need to present a well-structured report to your client using appropriate style and language. Structure of the Report: will include:
-Table of Content
-Body (in text citation: paraphrased or quotation to support your arguments)
-Reference lists (Harvard Style)
Structure of your assignment should be strictly follow the template provided in this guideline.
(no more than 150 words)
Briefly introduction of you work: the purpose of assignment, your findings and structure of your assignment (not more than 200 words)
II. ANALYSIS OF AUSTRALIAN FINANCIAL MARKET
2.1. Analysis of Australian financial market structure, including type of markets and types of financial institutions
Prepare a brief description of the Australian financial markets, including:
(3)Type of markets
(4)Types of financial institutions operating in the markets.
Analysis should be justified by necessary institutional documents, researches, journal articles and other reliable sources of information.
2.2. Identifying the sources of financial service and financial information available for investors in Australia
Do a research and should address the following questions: If the investor would like to invest in shares, bonds and derivative securities in Australia:
(1)Which financial institutions should they approach to open accounts and place their order for buying and selling that securities?
(2)Is there any limitation on foreign investment in Australian securities market?
(3)How do foreign investors pay tax on their income from investment on Australian securities market?
HC2091 Business Finance
(4)If the investor would like to obtain information such as historical and current share, bond and derivative prices, which websites or organizations provide that kind of information?
(5)How the investor can obtain financial statements for their analysis of a firm financial performance
(6)What kind of financial statements are available for investors and what information they can exploit from each kind of financial statement for evaluating firm financial investment?
2. 3. Analysis of popular tools of capital budgeting (investment criteria) for Australian firms
Identifying and analysing the popular practices of capital budgeting (investment criteria) for project evaluation taken by Australian companies. The following questions should be discussed and organized in a table:
(1)What are the investment criteria?
(2)What is the rationale for each criterion?
(3)What is the decision rule for each criterion?
(4)What are advantages and disadvantages of each criterion?
(5)Which criteria is more or less popularly used in Australia? Why is that?
2.4. Analysis of the Australian Bond market
Do a research and provide analysis of Australian bond market. The following questions should be address:
(1)Where the bonds are traded secondarily in Australia? What are the types of bonds are traded in that market place?
(2)Who provide bond rating service and what are ratings used for bonds in Australia?
(3)Identify the key differences between Australian Government Bonds and Corporate Bonds
(4)Explain the nature of yield to maturity (YTM), identify the relationship between coupon rate and YTM, using an example of bond evaluation with coupon rate which is higher and then lower than YTM for illustration.
(5)What is the interest rate risk and how does it affect bond price?
2.5. Analysis of Australian Share market
Do a research and provide analysis of Australian share market. The following questions should be addressed:
(1)What is the name of listed stock market in Australia, how is it operated, how many shares are traded in the market place at the present?
(2)What is the oldest share index in Australia, what does it measures, how many listed stocks are there in the index at the present and how the index is calculated?
(3)What is market capitalization of a listed company, how is it computed?
(4)Go to ASIC website and obtain 3 years historical movement graph of that index
(5)Comment on the trend, do a research and identify the factors that may explain the trend.
2.6. Identifying and recommending of a potential industry for financial investment
Identify an industry that you think potential for the investor to invest in the Australian financial market.
Justify your recommendations by providing data supported analysis on the following areas:
(1)Market capitalization of the industry
(2)Historical data of stock market price. Tips: searching for specific industry index, for example Australia Construction Index or Health Sector Index at https://www.asx.com.au/products/sector-indices.htm
(3)Financial performance analysis of the industry
Summarize the outcomes of your works (not more than 300 words)
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