Managing Finance

Mean Return in Australia Market
Particulars Performance
Australian Index -23.47%
CSL.AX 25.05%
CBA.AX -19.91%
BHP.AX -15.73%
WBC.AX -39.82%
NAB.AX -37.16%
Analysis of Australian Market
 Australian Index dropped by 23.47%
 CSL however has a positive return of 25.05% against the market sentiments
and all other industry peers
 Reasons:
 A) Biotechnology Company, engaged in research and development which is the
key in pandemic (Foley et al., 2020)
 B) Very Strong Fundamentals and financially very strong company
 C) Good asset quality and very strong financial statement which makes the
company unaffected to small changes in industry
 D) Engaged in supply of essential commodities and therefore a key player in
the pandemic times
Underperforming of Shares
 Australian Index dropped by 23.47%
 Almost all the shares underperformed amongst the top 5 companies in terms
of market capitalization. Principal reasons for the same are :
 Lack of financial capabilities of the investors to continue investing
 Lack of liquidity in the markets thereby forcing the investors to withdraw
investments (Salisu et al., 2020).
 Poor business situations and global recession leading to multiple reduction in
investments all across
 Lack of confidence in the market and the expectations of future returns are
poor. Hence the investors choose to withdraw money from the markets
Underperform or overperform the index
market
 Considering the changes and the patterns of the returns, there are cumulative
performances of the stocks. As per the analysis, there are positive skew of the
stock returns which occurs and then there are stocks which tend to lose 100%.
The positive return for the stock is above 100%. Hence, the analysis of the
data includes the importance of the diversification which leads to the
reduction in the variance of the portfolio returns. Hence, the skewed
distribution helps in discussing about the active managers to keep up with the
index (Baur et al., 2020).
Mean Return in Indian Market
Particulars Performance
Indian Sensex -22.22%
RELIANCE.NS -14.58%
TCS.NS -18.66%
HDFCBANK.NS -24.77%
HDFCLIFE.NS -23.15%
HINDUNILVR.NS 19.21%
Analysis of Indian Market
 Indian Sensex dropped by 22.22%
 Hindustan Unilever however has a positive return of 19.21%
against the market sentiments and all other industry peers
 Reasons:
 A) Engaged in the FMCG Business which takes care of day to day
essentials and the demand for their products never reduced
during the lockdown in India
 B) The company ventured into the sanitization products and that
indeed led to ensuring higher profitability and products for the
enterprise, thereby ensuring that higher sales for the company
(Gulati, 2020).
 All the other shares like Reliance, TCS, HDFC, HDFC Life has
dropped. The reason being the lack of investor confidence in
these shares and the overall slowdown in the market and
economy. The investors chose to reduce the investment from the
overall markets
Share Data for Australia Market
Particulars St Dev Weight Return Portfolio Return
CSL.AX 2.65% 0.20 25.05% 5.01%
CBA.AX 2.71% 0.20 -19.91% -3.98%
BHP.AX 2.51% 0.20 -15.73% -3.15%
WBC.AX 2.71% 0.20 -39.82% -7.96%
NAB.AX 2.75% 0.20 -37.16% -7.43%
Mean Return -17.51%
Standard Deviation -3.34%
Beta
2.19
Share Data for Indian Market
Particulars St Dev Weight Return
Portfolio
Return
RELIANCE.NS 2.98% 0.20 -14.58% -2.92%
TCS.NS 2.53% 0.20 -18.66% -3.73%
HDFCBANK.NS 2.51% 0.20 -24.77% -4.95%
HDFCLIFE.NS 3.25% 0.20 -23.15% -4.63%
HINDUNILVR.NS 2.25% 0.20 19.21% 3.84%
Mean Return -12.39%
Correlation Coefficient -58.83%
Beta 4.75
Portfolio for Investment – Indian
Companies
 The overall market structure in India is very positive and they
have shown strong market sentiments in the stock market
 The shareholders have strong positive expectations on the market
and they have expectations for higher return in the market
 The financial flow of money has been very positive all across.
Even when all the share price reduced, the company could
manage to earn positive results, thereby ensuring proper and
higher results for the overall investment
 The overall investment in the companies have generated positive
net worth for the company (Papadamou et al., 2020)
 The overall risk factor for the company has been positive and
there is lower chances of investment to reduce
Australia Bond Market
 Overall positive markets
in respect of bonds are
considered
 The interest rates have
not fallen considerably
and hence the returns
have been positive for
the market
Indian Bond Market
 Overall negative
markets in respect of
bonds are considered
 The interest rates have
fallen considerably
 Market sentiments do
not indicate positive
investment climate
 Overall lack of
investment
References
 Foley, S., Kwan, A., Philip, R., & Ødegaard, B. A. (2020). Contagious Margin Calls: How Covid-19
threatened global stock market liquidity. Available at SSRN 3646431.
 Papadamou, S., Fassas, A., Kenourgios, D., & Dimitriou, D. (2020). Direct and Indirect Effects of
COVID-19 Pandemic on Implied Stock Market Volatility: Evidence from Panel Data Analysis.
 Salisu, A. A., & Vo, X. V. (2020). Predicting stock returns in the presence of COVID-19 pandemic: The
role of health news. International Review of Financial Analysis, 101546.
 Baur, D. G., & Trench, A. (2020). COVID-19 Infection of Australian Companies. Available at SSRN
3609110.
 Gulati, M. (2020). The value of voluntary COVID-19 securities disclosure—zero?. Capital Markets Law
Journal.