ECF2210 Capital Markets Assignment Sample

Part 1: Stock Transaction and Exchange Game Journal

Overview:

This journal is based on the activities which were performed in the duration of march 23 to May 14 related to stock trading. In this regard, the first week of the demo is not regarded to be part of the assessment as the work was initiated on the 30th of March. The ending of this trading activity came to happen on 14th May 2020. In this regard, a duration of about 6 weeks and 3 days is completed. In between the duration of these 6 weeks, decision making was performed on the basis of weekly routine while monitoring was were being performed on a daily basis as the trading was procured. The end of the trading activity was on 14 May 2020. It is about six weeks and three days.

The decision making ona weekly basis has been made, and monitoring is done on a daily basis after making the trade of the dayIn this regard, the considerable fact is that I was supposed to make 8 trades in the whole week and four trading activities were performed in the basis of S&P/AS 200 indices and the rest of four trades were to be procured in the form of large and small-cap stocks. There were different modes for demonstration of both economic behaviors and trading patterns. There are numerous learning outcomes which have been obtained by the practical implications of the trading analysis, and the decision-making has been procured on the basis of fundamental and technicalities assessments. In this exploration, both the daily activities and procedural implications for decision-making have been explained on a daily basis.

Week 1:

It was first week of establishing the course of trading experience, and it has been quite challenging in the commencement of the process. This was the week of 1st meansure in which the course of practical accomplishment has been established. It is always assessed in the domain of difficulty when there are established measures associated with the practical implications of difficult executions. The training is evaluated to be commenced by me on the site of stock operations. The covering of the problems is executed and the implications of inducting the operations management of the site are carried out (Cepni, Guney, Kucuksarac, & Yilmaz, 2019 ).

The decisions in the trading pattern are carried out according to the knowledge acquired through timely learning. The selection of learning has been made on the random basis and there are measures which are opted on the basis of the random selections. The period of change has been measured in the course of assessing the basis of selection is observed to be devoid of any kind of predictions associated with the course of predictions and assessment of numbers. The evaluation maintained in the course of learning and understanding is the factor which is carried out in the form of results and the measure of first profit is carried out by me. The common course of learning is established by me in the first week. There are no special considerations based on the course of carrying out decisions assessment (Bartram & Grinblatt, 2018 ).

Week 2:

The assessment of this tenure is elaboration which is maintained in the course of attaining insights which are carried out in the ascertaining of the different propensities of operations. These operations are carried out in the course of elaborating on the basis of behaviors and commencement of impact on the course of profitability of trade. There is maintenance of the stock which is commenced on the basis of establishing the different distinctions of trade and commencement of security considerations through the course of monitoring. The different basis of development and depicted measure of the implications are carried out in the course of financial factors which are related to the course of valuation associated with the security. In this manner the different valuations centered on the trade are depicted in the elaboration of the decisions executions (Compare Remit , 2020).

Week 3:

In management to third week, it is assessed by me that the different analysis phases are assessed to be executed in the course of operations. These are the different operations which are assessed to be evaluated in the dimensions of ineffective initiations unfolded by pandemic. This impact has caused the global economy to downgrade in the expanded notion. There are different factors of considerations which are observed by me in the past two weeks. There have been considerations in the fluctuation of the interest rates and the maintaining of the economic measure of development is hindered in the course of technical analysis (Iqbal & Jebran, 2016 ).

Week 4:

The effectiveness is severely hindered at week 4 of outbreak of the unexpected pandemic has caused the different variables to execute the course of recession in the global economy. I could not interpret this course of downward growth. The yield established in the certain variables is assessed to be executed on the course of assessments and developments based on the course of foreign exchange market have the contribution in the notion of learning. This growth is observed at the different levels of expansion. The equity market held in comparison the investment in the foreign market has shown quite low elaborations of yield (Lopatta, Alexander, Gastone, & Tammen, 2020).

Week 5:

There are estimations which are established in the course of impacts maintained as per the evaluations of COVID 19. These are the elaborations which are carried out in the course of estimations impacting the trade and thus maintaining the notion of avoidance. The maintenance of the effect is carried out as per the understanding of the little dimension of variance and estimations of effective monitoring rendering appropriate results. The factor of experience is the helpful understanding in the elaborations (Najafabadi, Bijari, & Khashei, 2019 ).

Week 6:

In the decisions of handling the course of associations of the equity market are the measures which are proved to be way easier to handle as compared to the other markets. There are different considerations which are maintained in the course of understanding associated with the implications of measures carried out in the depictions of technical analysis and the understanding of fluctuating prices (Lopatta, Alexander, Gastone, & Tammen, 2020).

Part 2: A Reflective Assessment

Question 1.1:

I have traded in two different markets of the stock exchange. 1st market is the Foreign exchange market, and 2nd one is based on the equity markets. The share prices of the market are based on various factors. Reflective Assignment on Trading Sequences .There have been observed numerous factors which impact on markets and due to which prices in each market are changed; thus, some of them are as follows:

• Inflation rates are tended to transformed on the basis of exchange rates in the market, and in this regard, imperative outlooks are the impact of prices by the inflation one country or both countries.

• Interest rate is also regarded to be imperative in this regard as transformation in its trends and patterns; there will be an alteration of both prices of stocks and exchange rates. The increment in the interest rates tends to depend and appreciate the currency of the country.

This reliance and appreciation will actually improve the communal interactions for saving and not for investing, which are regarded to be core reasons in order to increase the exchange rates.

• For instance, if the economic conditions are completely at the recession, then, interest rates in its relevancy are more likely to decrease; thus, the declined interest is mainly the demonstration of fewer investments of relevant capitals.

• In this market, cost implications will be at such a point when both rates for supply and demand will become equal, and that situation is referred to as the equilibrium of the market.

• The political atmosphere will mainly determine the equity rates and prices in the markets. In this regard, it can be stated that when the insinuations of political leadership intervene for determination of cost implications, then the probability for fluctuation of costs is more likely to enhance and thus, ultimately regular pattern is disturbed in this regard.

• Market players and investors have an impact on share prices. With more bulls than bears, there is an increase in price and vice versa (Wall Street , 2018 ).

Question 1.2:

a) Foreign Exchange Market:

The major factors which I have perceived during the processing of this game, are more likely to be those which impact on the exchange rate and in the regard the foremost factors are thenstrategical implications of the free market. If the strategical implications are intended to be transformed by regulatory and administrative authorities, then their exchange rates are more likely to be altered. It has also been observed that if there are different existent rates of interest, then adjustments of exchange rates are more likely to be procured in the relevancy of that interest rate. So, to sum up, the interest rates mainly impact on the exchange rates. While reading the article written by Ha Trong Nguyen and Alan S Duncan, I have come to know the above-mentioned factors. Also, I have practically seen the effect while playing the game.

b) Equity Factors:

As far as the equity market and its relevant factors are concerned, it is significant to note that it is one of the free markets, which is mainly proceeded on the basis of demand and supply procurements. The determination of prices is performed by the conditional insinuations of markets and thus, any alteration, in the prices will also influence on the exchange rates and the second factors, which is observed in the market is the attitude of both the market players and investors. According to the insights of Angel Zhong scripture, it has been professed that market players usually try to intervene in the costing insinuations and the interventions for marketing trends.The performance of activities is disturbed by the exchange rates, and exchange is affected by the various factors (Zhong, 2018 ).

Question 1.3:

There have been existent numerous of common factors which directly impact the prices of markets in both of the countries and in this regard, the interest rate is considered to be one of the factors which are more likely to impact on both markets. Thus, exchange rates, as well as the costing implications both, are slightly or completely transformed by insinuations of interest rates, In this regard, the exploration by Khalil Jebran and Amjad Iqbal both can be instanced that both of the markets are differentiated. In this regard, it is significant to note that some aspects of both markets are related when it comes to comparison between Asian Markets. Explorations have provided a stout piece of evidence that factors were interpreted according to the sequencing of Australian markets while for Asian markets and countries, there are employed different factors. Moreover, the interest rates have been professed to have some impacts on the state.

Question 1.4:

On the basis of weekly procurements, decisions have been made and foremost of them, it is important to note that consideration was kept on the focus for the analysis of future changes and transformations of exchanges rates in between two states. Thus, one of the major factors which were considered while the procurement influences on the costing, was decision-making. The market equity has been observed to be much more comfortable as far as the dealings and formation of decisions is concerned. In this domain, the reason for ease is based on the intimations of determinable and free forces of the market and in the maintenance of foreign exchange markets, there have been prevailed numerous challenges.

These challenges are more likely to be based on dynamics formation and maintenance of differences factors for exchange rates. The core theme behind this insinuation includes the intimation that daily decisions are usually taken for daily fluctuations of prices and other relevant trends and attitudes. It is significant to note that effective employment of predictions tends to make successful decisions. It can be stated that the information related to the prediction of time series has been employed for making decisions on a weekly basis. The decisions which are made on a daily basis are usually analyzed by generic trends.

In this regard, the identical strategical implication was employed for deciding elements throughout the period. There was not a transformation in order to procure the decisions and thus, numerous learning opportunities have been developed for me in this regard by this game. I would like to include that I have been able to make decisions in a much comprehensive and improved manner in the fiscal markets and domains. Moreover, an opportunity is also provided for the demonstration of factors which can probably impact the prices and decision-making as well. Moreover, forecasting of behaviors and trends of markets have been explained by this process in an appreciable manner.

Part 3: An Exploration Report

Question 1.5:

The significant aspect in the relevancy of sovereign bonds is that these are interest rates at which national government usually take loans for most often meeting the requirements of national expenditures. Sovereign bonds usually provide with the facilities in order to increase the government finances. Moreover, another notable aspect related to these include the insinuations that purchases for sovereign bonds are usually procured by investors from governments. On maturity, these bonds provide with full face valuations. This fact cannot be shorn off that curve of the sovereign is the line which encompasses the relationship between different interest rates for debt quality at different rates of maturity.

Any fluctuation in the curve represents that interest rates of different bonds with the encompassment of debt quality at different maturity levels. Fluctuation is the clear representation that all of the activities of the economy have been changed with the maturity of time usually the same curve is employed for the prediction of economic changes, for growth and output as well. Moreover, it is also imperative that prediction is performed in between three months to 30 years.

After the assessment of sovereign curve of 28th February 2020, it has been observed that value of yield was about 0.9 and from the duration of 3 months to a complete year, there was a period of seven months, in which yield has been declined to the value 0.7. Predictions have provided a stout piece of evidence that in imminent years, this curve and yield will be further decreased and the minimum yield which could be possibly observed amongst these three years is observed to be 0.3. After the passage of 3 years, it has been observed that there will be consistently increased and the first incline in the curve can be observed from declination.

In this regard after the passage of nine years, the yield will be professed to be 0.85t while the maximum highest value of yield which can be observed within the duration of 30 years is observed to be 1.40. Assessments of the curve, at March 6th, have provided a stout piece of evidence for the identical pattern will be observed as the yield is much more likely to be decreased in the duration of 3 years and there will be sudden and sharp incline after the duration passé of three years. Most of the procured yield has the probability of being increased after the duration of thirty years, irrespective of this fact that what trend was procuring in the market.

At the duration of three months, the value of yield is observed to be 0.61 and for the duration passé of three years, it is significant to note that yield will be reached at 0.3 and after the passage of 30 years, its value is expectedly professed to be 1.25 which is quite less than that of previous quantity. The developed comparison has provided a stout piece of evidence that overall decline in the yield can be observed in the second curve because this decline in the second curve has clearly represented over time with the declaration of severe economic and other relevant patterns which can be regarded as considerable in the yield decrement.

There is a requirement for the consideration of factors which are profoundly playing their part in the transformation of yielding trends and sequences. With the consideration of those factors, it is easy for anyone to overcome those factors and then make a better plan thus enhancing the overall yield. Still, there is existent a problem in the relevancy of economic conditions which are not easy for control. Thus, it can be stated any plan designer is more likely to change the decision of planning about the development of investments after the assessment of variations.

It can be stated that decline shows that economic growth is negligible and rates of interest have not been supporting the patterns of economy and growth such as yielding implications. This economic estimation can be directly made on the curve with the prediction of future behaviors of the economy, thus creating an overall comforting situation. There is also involvement real-life factors in the recession of the economy and in this regard, the major role is played by the severe outbreak which is existent across the whole globe.

It can be stated that COVID-19 has impacted the economy of four continents thus due to this pandemic yield on the basis of short-termed maturity has been professed to be decreased on the significant notes thus, the curve decrement for maturity is understandable. It can be observed that the long-termed maturity will provide better intimations of yields and inflation can be regarded as one of the factors which have played a great role in the prevention of yield. Unexpectedly, the rate of inflation has depicted the worst economic conditions.

It can be genuinely observed that general costing implication of different commodities has been inclined due to increment in the customer demand. The core reason which has been explained behind the patterns of demand increment include COVID-19 Pandemics. Though it was not expected by the financial estimators still, the higher demands have increased the prices of almost every commodity. In this regard, economic conditions across national and international levels both have been disrupted in a severe manner and ultimately, the whole situation has impacted the yield as well. It has been clearly represented by images and figures that trends and patterns for general prices have been increased much more than 1.43%. Besides that, it can be stated that inflation rates are tended for saving more than investments as the savings in this regards will definitely prevent the cash flows which is primarily based on the economy.

References

Bartram, S. M., & Grinblatt, M. (2018 ). Agnostic fundamental analysis works. Journal of financial economics , 125-147 .

Cepni, O., Guney, I., Kucuksarac, D., & Yilmaz, M. H. (2019 ). Do Local and Global Factors Impact the Emerging Markets’s Sovereign Yield Curves? Evidence from a Data-Rich Environment.

Compare Remit . (2020). 8 Key Factors that Affect Foreign Exchange Rates. Retrieved from Compare Remit : https://www.compareremit.com/money-transfer-guide/key-factors-affecting-currency-exchange-rates/

Iqbal, A., & Jebran, K. (2016 ). Dynamics of volatility spillover between stock market and foreign exchange market: evidence from Asian Countries. Financial Innovation .

Lopatta, K., Alexander, E.-K., Gastone, L. M., & Tammen, T. (2020). To Report or not to Report about Coronavirus? The Role of Periodic Reporting in Explaining Capital Market Reactions during the Global COVID-19 Pandemic. 37 .

Najafabadi, Z. M., Bijari, M., & Khashei, M. (2019 ). Making investment decisions in stock markets using a forecasting-Markowitz based decision-making approaches. Journal of Modelling in Management Volume 15 Issue 2 .

Nguyen, H. T., & Duncan, A. S. (2017 ). Exchange rate fluctuations and immigrants' labour market outcomes: New evidence from Australian household panel data. Journal of International Economics , 174-186.

Saglam, M., Moallemi, C. C., & Sotiropoulus, M. G. (2019 ). Short-term trading skill: An analysis of investor heterogeneity and execution quality. Journal of financial markets , 1-28 .

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Sowmya, S., & Prasnna, K. (2018 ). Yield curve interactions with the macroeconomic factors during global financial crisis among Asian markets. Internationa;l Review of economiucs and finance , 178 - 192.

Utami, W., Nugroho, L., & Farida. (2018 ). Fundamental Versus Technical Analysis of Investment: Case Study of Investors Decision in Indonesia Stock Exchange. Journal of Internet Banking and Commerce .

Wall Street . (2018 ). TRADING BASICS- FACTORS THAT INFLUENCE SHARE PRICES. Retrieved from Wall Street : https://wall-street.com/trading-basics-factors-influence-share-prices/

Wellmann, D., & Truck, S. (2018 ). Factors of the term structure of sovereign yield spreads. Journal of international money and finance volume 81 , 56-75 .

Zhong, A. (2018 ). Idiosyncratic volatility in the Australian equity market. Pacific - Basin Finance Journal , 105 - 125.

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