Small Business Activity Entrepreneurship

Introduction

Evaluation of investment portfolio for a stock broking company is important to keep the company updates with the stock selling and purchasing. In the study, the impact of globalisation on the portfolio investment is discussed. Presentation of evaluated investment portfolio is done in the study. Analysis on portfolio investment and recommendations are also provided in the study.

The globalised impact of financial market on respect of stock broking company and the major activities that influence financial market are discussed. As per Kidwell et al. (2016, p.145) the events and the announcements that financial companies make in respect of the financial changes are the main responsible factors affecting financial market. DeMiguel et al. (2014, p.132) said change in the share price, cash position; dividend income put their effect on the financial market. In respect of a stock broking company, the updating of financial market determines the company activities. Variable rate of stock price, share purchase price, share selling price, dividend and interest are the main components in the basis of which a stock broking company turn. The changes that put effects on these components change the activities of the stock broking company.

As per Chaboud et al. (2014, p.174) Value Investing strategy of investment portfolio is one of the best-recommended strategies that help a stock broking company by valuing its mutual fund. In reference to the case, the stock broking use to value the mutual fund, the dividend income and interest to analyse the progress of the company. According to Henrekson and Sanandaji (2014, p.175), the companies that follow the rules of valuing mutual funds, use to give the investors the chance of getting discounts on their share. In respect of the case study, the investors get discount based on the mutual fund valuation. According to Kalemli?ozcan et al. (2013, p.254), the stock of the company provides the opportunity to the stock buyer by giving index funds, actively managed funds or Exchange traded funds. In respect of the case study, the stock broking company sells exchange-traded funds to the investors in a discount rate.

Calculations on SPI 200 Index, S&P/ASX 200 Index & SP/ASX Australian including their average and standard deviation

Calculation on Share component, Futures contracts, Cash position, Portfolio value and Portfolio return

The average, standard deviation and Beta of the above calculation ios

As per Lim et al. (2014, p.175) analysis on the investment portfolio of every stock broking company needs to be done for having a good future course of business. In analysing the result of the outcome of the investment portfolio of the case study broking company, the portfolio return is analyzed first. According to the outcome made on the portfolio of the broking company, it can be analyzed that the overall return on the investment portfolio is average. Negative outcome are very frequent in respect of the portfolio return. As per Clare et al. (2016, p.185) the future contract needs to be good enough to have a good portfolio return in future. According to the calculation, in the future contract of the investment portfolio, the amount is quite satisfactory which ensures the future progress of the company to be good.

The cash position in the calculated period is kept intact. It is analyzed from the investment outcome is the amount of dividend shares. Zakamouline (2014, p.174) said that every stock broking company needs to have better dividend income by having better dividend interest. The dividend is zero and thus the dividend income is zero. This dividend amount affected the total dividend amount and is also very low in respect of the number of shares. Further the average on the portfolio outcome has been performed. The figure of the average is also not satisfactory. Standard deviation and beta calculations are also performed by using the Jensen Index formula.  The calculation is done based on the case study as at October 5, 2017. It can be analyzed from the investment portfolio outcome that the situation of the broking company is not perfect in respect to the number of stocks of the different company it holds.

Firstly, the decisions regarding the dividend income need to be developed for the company. From the calculation, it is found that the stock broking company is mainly providing 0% dividend to the stockholders of the company. In the contrast of a stock broking company, the figures of the dividend income are much less. However, influenced by Lim et al. (2014, p.176) it can be said that by developing the dividend percentage on the number of stocks, the company can again in future earn better return.

Secondly, the portfolio return needs to be developed by planning more efficiently regarding the stock purchase and sell. From the calculation, it is found that the stock broking company is facing almost negative portfolio return, which is very unaccepted situation. However, the selling and purchasing price if stock and shares and the discount rate needs to be rechecked and revalued so that the portfolio return always stays above 1.

Conclusion

In the study, the importance of the stockbroking company and its influences by the globalisation are discussed. It is found that the stock broking company applied mutual fund valuating strategy. It is found from the calculation that, portfolio return and dividend income of the company is very low. Negative return on portfolio is found in the calculation. It is seen that increasing the dividend rate and revaluating the purchase and sale price of the shares can develop the present situation of the company.

Reference list

Chaboud, A.P., Chiquoine, B., Hjalmarsson, E. and Vega, C., (2014). Rise of the machines: Algorithmic trading in the foreign exchange market. The Journal of Finance, 69(5), pp.2045-2084.

Clare, A., Seaton, J., Smith, P.N. and Thomas, S., (2016). The trend is our friend: Risk parity, momentum and trend following in global asset allocation. Journal of Behavioral and Experimental Finance, 9(1), pp.63-80.

DeMiguel, V., Nogales, F.J. and Uppal, R., (2014). Stock return serial dependence and out-of-sample portfolio performance. The Review of Financial Studies, 27(4), pp.1031-1073.

Henrekson, M. and Sanandaji, T., (2014). Small business activity does not measure entrepreneurship. Proceedings of the National Academy of Sciences, 111(5), pp.1760-1765.

KALEMLI?OZCAN, S.E.B.N.E.M., Papaioannou, E. and PEYDRÓ, J.L., (2013). Financial regulation, financial globalization, and the synchronization of economic activity. The Journal of Finance, 68(3), pp.1179-1228.

Kidwell, D.S., Blackwell, D.W., Sias, R.W. and Whidbee, D.A., (2016). Financial institutions, markets, and money. Hoboken: John Wiley & Sons.

Lim, S., Oh, K.W. and Zhu, J., (2014). Use of DEA cross-efficiency evaluation in portfolio selection: An application to Korean stock market. European Journal of Operational Research, 236(1), pp.361-368.

Zakamouline, V., (2014). Portfolio performance evaluation with loss aversion. Quantitative Finance, 14(4), pp.699-710.