Factors Affecting The Australian Financial Stocks

1. Introduction Financial stocks are the shares issued by financial industries. With the development of global economics, the volatility of global stocks market reflects the economic situation across a number of countries. As a result, each nation’s fluctuation of stocks plays a significant role in its own economy. Furthermore, the financial stocks that act as an important sector of the whole stock market are caused fluctuating by a large number of factors. Without exception, there is a great number of reasons for the volatility of Australian financial stocks, which cause the whole financial share market fluctuating unsteadily in Australia as well. The purpose of this report is to discover the most influential cause of financial stocks volatility in Australia. Moreover, This report will analyse three main factors: a combination of three financial instruments, legal framework and inancial industry fundamentals, which influence the volatility of Australian financial stocks. 2. Three main factors affect the Australian financial stocks 2.1 A combination of three financial instruments: monetary policies, interest rate policies and foreign exchange rate In general, Australian financial policies can impact volatility of the local financial stocks. First of all, Faffa and Brailsfordb (1999) reprot that the Australian government is more likely to use the monetary policies, interest rate policies and foreign exchange rate policies as the financial policies to regulate theShow MoreRelatedSwot Analysis Of Rio Tinto- One Of The Biggest Mining Corporations904 Words   |  4 Pagesprices of the overall stock market index SP/ASX200 and Rio Tinto during 1 January 2013- 1 January 2017. The report also illustrates the weekly returns of SP/ASX200 and RIO TINTO to measure the percentage change in share prices from one week to the next during the same 4year period. Another aspect that the article focuses on is the key events and trends in the global financial markets affecting the overall Australian market and Rio Tinto. 2.0 Performance of the overall stock market index SP/ASX200Read MoreThe Importance Of Investment In Foreign Markets1100 Words   |  5 PagesInvestment in foreign markets represents an untapped resource for many Australian investors. This report will investigate the benefits and challenges in assigning part of a portfolio into overseas companies. The first section will look at the literature relating to international portfolio management and the second part will deal with the importance of corporate governance. Global investment Home bias is a phenomenon in which local investors show an overwhelming preference for home investment overRead MoreThe Micro Economy Of Australia922 Words   |  4 Pages Microeconomic study deals with what choices people make, what factors influence their choices and how their decisions affect the goods markets by affecting the price, the supply and demand. In particular, microeconomics emphasis on patterns of supply and demand and the resolution of price and output in individual markets (e.g. coffee industry). The Micro economy of Australia is one of the largest mixed market economies in the world, with a GDP of US$1.525 trillion as of 2014.Australia s totalRead MoreWoolworths Ltd (WOW) Valuation Report1740 Words   |  7 PagesExecutive Summary This report provides a price analysis and valuation of the Australian Security Exchange (ASX) listed company, Woolworths Ltd (WOW). Historical data is utilised with the Retention Growth Model to estimate the expected perpetual semi-annual growth rate of the company’s dividends. The Capital Asset Pricing Model is used to estimate the required rate of return for this company and the current expected share price is calculated using the Constant Dividend Growth Model. All data canRead MoreFin111 Financial Markets and Economic Principles5698 Words   |  23 Pages[pic] Financial Markets and Economic Principles (FIN111) Assignment Answer Template |Students: Please enter |Word count | | |your word count for this |I have read the Assignment Guide in the Subject Room and have applied the word count | | |assignment |principles to my work. Read MoreWhy Monetary Policy Transmission Affects Economy Wide Interest Rates Essay1240 Words   |  5 PagesThe transmission mechanism of interest rates begins with the RBA either increasing, or decreasing the overnight cash rate as (Kent 2015) mentions. This leads Financial markets to make changes to the future path of cash rates and the structure of deposits and lending rates. These changes then transmit their ways to aggregate demand, affecting several components of the PAE. (Diagram A) illustrates a Keynesian model with the RBA implementing an expansionary monetary policy. Note implementing a contractionaryRead MoreForeign Exchange Market and Currency1885 Words   |  8 Pageschanges in the apparent value of currencies. These changes incur a loss when the profit or the dividends of the investment are calculated from the local currency into the U.S. Dollar. â€Å"For example, suppose that a U.S.-based investor purchases a German stock for 100 euros. While holding this bond, the euro exchange rate falls from 1.5 to 1.3 euros per U.S. dollar. When the investor sells the bonds, he or she will realize a 13% loss upon conversion of the profits from euros to U.S. dollars.† ( http://internationalinvestRead MoreQantas Airline Financial Valuation and Sensitivity Analysis3525 Words   |  15 Pages Table of Contents Executive summary 1 Introduction 2 VALUATION 2 1. Select a company listed on the Australian Stock Exchange, find and download the following data 2 2. using the data from 1b and 1c construct a Characteristic Line and determine Beta for the company. Is this Equity or Asset Beta? 2 3. Rebuild the Five Year Historical Financial Statement, extracting only relevant cash flow data for NPV analysis 5 4. Forecast another five years of relevantRead MoreMaa 7254100 Words   |  17 Pagesclear and concise manner our viewpoint towards remuneration disclosure, considering steps to improve this matter of contention is taken voluntarily by the boards as recently stated by The Australian Financial Review. Section I explains our disposition about amendments done concerning disclosing remunerations. Financial accounting principle theories utilised, along with published printed information came to our conclusion which suggests executive pay reports simplification is substantial to shareholdersRead MoreThe Australian, Health International Holdings Group1916 Words   |  8 Pagesprovider. HIH demise impacted Australian business especially in the building industry, leaving builders covered by the giant insurer with no insurance and little hope for any means of a replacements insurer. The aftermath of the collapsed giant resonated amongst many leaving the building industry virtually flat, halting and impacting individuals with skeleton house frames of their dream homes left unfinished by the various building companies left without insurance. The Australian, Health International Holdings