Small Business Activity Entrepreneurship

Discuss about the 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

date	SPI 200 Index Futures Ccontract	S&P/ASX 200 Index		S&P/ASX Australian Government Bond Price Index
7/10/2017	5663	5724.44		100.70
7/11/2017	5661	5728.93	0.000784	100.64	-0.00068
7/12/2017	5613	5673.83	-0.00966	100.73	0.000973
7/13/2017	5681	5736.77	0.011031	100.88	0.001419
7/14/2017	5678	5765.12	0.00493	100.79	-0.00091
7/17/2017	5685	5755.47	-0.00168	100.72	-0.00064
7/18/2017	5619	5687.39	-0.0119	100.58	-0.00142
7/19/2017	5652	5732.13	0.007835	100.62	0.000457
7/20/2017	5686	5761.45	0.005103	100.58	-0.00048
7/21/2017	5651	5722.84	-0.00672	100.80	0.002175
7/24/2017	5612	5688.07	-0.00609	100.85	0.000536
7/25/2017	5650	5726.60	0.00675	100.80	-0.00051
7/26/2017	5703	5776.63	0.008698	100.69	-0.00112
7/27/2017	5706	5785.01	0.00145	100.85	0.001598
7/28/2017	5620	5702.82	-0.01431	100.85	6.94E-05
7/31/2017	5647	5720.59	0.003112	100.89	0.000367
8/1/2017	5700	5772.37	0.009011	100.76	-0.00131
8/2/2017	5667	5744.20	-0.00489	100.80	0.000397
8/3/2017	5652	5735.12	-0.00158	100.93	0.001259
8/4/2017	5646	5720.58	-0.00254	101.05	0.001198
8/7/2017	5692	5773.56	0.009218	100.99	-0.00058
8/8/2017	5664	5743.75	-0.00518	100.99	3.96E-05
8/9/2017	5684	5765.66	0.003807	100.91	-0.00078
8/10/2017	5685	5760.93	-0.00082	100.85	-0.0006
8/11/2017	5627	5693.14	-0.01184	101.10	0.002496
8/14/2017	5658	5730.41	0.006525	100.98	-0.00122
8/15/2017	5689	5757.48	0.004714	100.87	-0.0011
8/16/2017	5733	5785.10	0.004786	100.79	-0.00078
8/17/2017	5732	5779.21	-0.00102	100.85	0.000615
8/18/2017	5692	5747.11	-0.00557	100.94	0.000892
8/21/2017	5665	5725.85	-0.00371	100.84	-0.00101
8/22/2017	5698	5750.12	0.00423	100.81	-0.00033
8/23/2017	5681	5737.16	-0.00226	100.69	-0.00113
8/24/2017	5697	5745.48	0.001449	100.83	0.001389
8/25/2017	5696	5743.86	-0.00028	100.79	-0.00046
8/28/2017	5663	5709.89	-0.00593	100.67	-0.00117
8/29/2017	5617	5669.01	-0.00719	100.81	0.001439
8/30/2017	5636	5669.72	0.000125	100.61	-0.00201
8/31/2017	5674	5714.52	0.007871	100.51	-0.00099
9/1/2017	5686	5724.59	0.001761	100.70	0.001839
9/4/2017	5665	5702.00	-0.00395	100.82	0.001211
9/5/2017	5678	5706.23	0.000742	100.60	-0.00214
9/6/2017	5659	5689.73	-0.0029	100.87	0.002641
9/7/2017	5664	5689.88	2.67E-05	100.70	-0.00172
9/8/2017	5655	5672.62	-0.00304	100.89	0.001875
9/11/2017	5693	5713.15	0.00712	100.80	-0.00089
9/12/2017	5734	5746.44	0.00581	100.68	-0.00116
9/13/2017	5734	5744.26	-0.00038	100.55	-0.00125
9/14/2017	5723	5738.68	-0.00097	100.33	-0.00222
9/15/2017	5680	5695.02	-0.00764	100.24	-0.00092
9/18/2017	5708	5720.60	0.004481	100.00	-0.00233
9/19/2017	5702	5713.58	-0.00123	99.93	-0.00072
9/20/2017	5699	5709.09	-0.00079	99.88	-0.00052
9/21/2017	5642	5655.42	-0.00945	99.90	0.00018
9/22/2017	5672	5682.14	0.004713	100.01	0.001111
9/25/2017	5671	5683.73	0.00028	99.98	-0.00033
9/26/2017	5659	5670.98	-0.00225	100.07	0.00095
9/27/2017	5641	5664.28	-0.00118	100.03	-0.00038
9/28/2017	5646	5670.39	0.001077	99.80	-0.00236
9/29/2017	5668	5681.61	0.001978	99.88	0.000861
10/2/2017	5712	5729.33	0.008364	99.75	-0.00136
10/3/2017	5679	5701.44	-0.00488	99.86	0.001142
10/4/2017	5628	5652.06	-0.0087	99.97	0.001091
10/5/2017	5634	5651.77	-5.2E-05	100.09	0.00121
10/6/2017		Average	-0.0002	Average	-9.7E-05
		SD	0.005783	SD	0.001262

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

	Share component	Futures contracts	Cash position	Portfolio value	Portfolio return
7/10/2017	7360261	80000	273055	2000000
7/11/2017	7363767	80200	273055	7717022	1.35028141
7/12/2017	7303048	85000	273055	7661103	-0.007272583
7/13/2017	7341535	78200	273055	7692790	0.004127483
7/14/2017	7340025	78500	273055	7691580	-0.000157206
7/17/2017	7322693	77800	273055	7673548	-0.002347223
7/18/2017	7239246	84400	273055	7596701	-0.010064974
7/19/2017	7265289	81100	273055	7619444	0.002989256
7/20/2017	7310637	77700	273055	7661392	0.005490358
7/21/2017	7295071	81200	273055	7649326	-0.001576193
7/24/2017	7258399	85100	273055	7616554	-0.004293472
7/25/2017	7281666	81300	273055	7636021	0.002552648
7/26/2017	7338709	76000	273055	7687764	0.0067533
7/27/2017	7280815	75700	273055	7629570	-0.007598508
7/28/2017	7240946	84300	273055	7598301	-0.00410681
7/31/2017	7252737	81600	273055	7607392	0.001195765
8/1/2017	7265805	76300	273055	7615160	0.001020531
8/2/2017	7279565	79600	273055	7632220	0.002237852
8/3/2017	7285734	81100	273055	7639889	0.001004246
8/4/2017	7259029	81700	273055	7613784	-0.003422807
8/7/2017	7299914	77100	273055	7650069	0.004754442
8/8/2017	7290126	79900	273055	7643081	-0.000913939
8/9/2017	7320204	77900	273055	7671159	0.003666929
8/10/2017	7314009	77800	273055	7664864	-0.000820972
8/11/2017	7250763	83600	273055	7607418	-0.007522904
8/14/2017	7277005	80500	273055	7630560	0.003037413
8/15/2017	7332967	77400	273055	7683422	0.006903857
8/16/2017	7356672	73000	273055	7702727	0.002509385
8/17/2017	7316923	73100	273055	7663078	-0.005160735
8/18/2017	7277007	77100	273055	7627162	-0.004697889
8/21/2017	7236549	79800	273055	7589404	-0.004962786
8/22/2017	7261713	76500	273055	7611268	0.002876762
8/23/2017	7284706	78200	273055	7635961	0.003238923
8/24/2017	7279183	76600	273055	7628838	-0.000933243
8/25/2017	7278322	76700	273055	7628077	-9.96715E-05
8/28/2017	7234619	80000	273055	7587674	-0.005310767
8/29/2017	7201057	84600	273055	7558712	-0.003824193
8/30/2017	7201381	82700	273055	7557136	-0.000208557
8/31/2017	7262693	78900	273055	7614648	0.007581515
9/1/2017	7283523	77700	273055	7634278	0.002574572
9/4/2017	7248611	79800	273055	7601466	-0.004307317
9/5/2017	7255430	78500	273055	7606985	0.000725799
9/6/2017	7222572	80400	273055	7576027	-0.004077977
9/7/2017	7225350	79900	273055	7578305	0.000300627
9/8/2017	7162071	80800	273055	7515926	-0.008265314
9/11/2017	7230359	77000	273055	7580414	0.008543577
9/12/2017	7291138	72900	273055	7637093	0.007449208
9/13/2017	7298504	72900	273055	7644459	0.000964117
9/14/2017	7306533	74000	273055	7653588	0.001193376
9/15/2017	7288876	78300	273055	7640231	-0.001746625
9/18/2017	7304359	75500	273055	7652914	0.001658675
9/19/2017	7318317	76100	273055	7667472	0.00190041
9/20/2017	7291030	76400	273055	7640485	-0.003525932
9/21/2017	7287758	82100	273055	7642913	0.000317838
9/22/2017	7314219	79100	273055	7666374	0.003064911
9/25/2017	7308241	79200	273055	7660496	-0.000766982
9/26/2017	7318300	80400	273055	7671755	0.001468604
9/27/2017	7326602	82200	273055	7681857	0.001315883
9/28/2017	7320479	81700	273055	7675234	-0.000862505
9/29/2017	7318716	79500	273055	7671271	-0.000516425
10/2/2017	7351948	75100	273055	7700103	0.003751297
10/3/2017	7362416	78400	273055	7713871	0.00178652
10/4/2017	7310109	83500	273055	7666664	-0.006138596
10/5/2017	7323464	82900	273055	7679419	0.001662296
10/6/2017	3733804	646300	244913.7	4625017	-0.507063712

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

Average	0.013098953
SD	0.181285651
Beta	0.252910465

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.