Assignment Support / Internet Research

You can search for a company’s ASX code or you could go to the following Address to find a company’s code or even download a complete listing of Companies currently listed on the Australian Stock Exchange.

Another website you should research to help with your assignment is Yahoo Finance. The following link allows you to download ASX indicies and Historical prices for any listed company . Enter the start and end date to obtain relevant historical prices. Then copy and paste this data into a spreadsheet. Sort the data into Chronological order and graph the movements over time.

Another site worth exploring to assist with your assignment is The trading room at the following links

Selecting Earnings Summary or Announcements for any Company will help you determine the potential dividend or income stream from any selected company based on prior performance.

Internet Research Tasks

(1) Go to Type Wikipedia then search.

Type “Renounceable Rights Issues” or “Rights Issue” at Google or Wikipedia and find out What Rights issues are and how you can sell them.

(2) Also search for “Private Placement” on Google or Wikipedia.

If you find something interesting highlight the text and copy and paste it into a Word Document – save it as Research ASX.

elow is some information I found when doing step (1) above

Avexa Limited

ABN 53 108 150 750

Prospectus for renounceable rights issue of 2 New Shares for every

5 ordinary shares at 53 cents per New Share to raise approximately

$60.2 million before expenses.

The last date for applications and payment to be received is 5pm

on Thursday, 19 April 2007.

This is an important document and requires your immediate attention.

It should be read in its entirety. If you are in doubt about what to do,

you should consult your professional adviser without delay.

Underwriter: ABN AMRO Morgans Corporate Limited

Then I asked myself –“is this a good deal? What is the current market price of Avexa.

I went to the Australian Stock Exchange website - ASX – (go to Google type “Australian Stock Exchange” search

Then on the Australian Stock Exchange website from the Left hand window select “Prices research and Announcements” then select “Company Research” type in the Company name or their code in this case AVX – then we can find the current market price is .765 – so the rights issue at 53 cents represents a 37% discount on the market price.

Treasure Hunt for Info on ASX site

(1)Go to Google type ASX search pages from Australia – click on ASX site

(2)Scroll down to the bottom of the page in the section with “Home / Contents …” have a look through FAQs and spend some time browsing through the Glossary – the rule is “follow your nose” – meander through info. that interests you.

(3)In the education area of the ASX site have a look at Shares, Options and Warrants. What did you discover that you didn’t know before?

(4)Can you find the difference between “Options” and “Warrants”? If not try Wikipedia - or Google.

(5)Back at the ASX site use the ASX search tool to find any info on Dividends. See if you can find the schedule for Upcoming dividends

(6)Note cum div – shares will attract the most recently announced dividend. “ex” shares will not receive the most recent dividend

(7)If I bought shares in Woolworths on 20/3/08 would I be eligible to receive the 44 cents per share dividend?

(8)Are the WOW shares fully franked?

(9)I bought 10,000 shares in WOW on 4/1/2000. If I paid the closing price on that day – how much did I invest?

(10)What dividend will I receive?

(11)Remember this is only one of the dividends I’ll receive – I’ll possibly receive another $4500 as well.

(12)Assuming inflation has been running at 3% from 2000 to 2008 – what percentage return did I receive in dividends? (Convert the 4/1/2000 price paid for my 10000 WOW shares to today’s dollars)

(13)What if I bought 10000 WOW shares on 7/3/08 – what would they cost me if I paid the closing price?

(14)What capital gain would I receive if I had bought the WOW shares on 4/1/2000 and sold them on 7/3/08?

(15)Use your financial calculator to find out what annual compounding interest rate this represents.

Investments – How do you pick them? When do you sell?

Comments to Student1

What an amazing result for Fortescue Metals Group Ltd (FMG.AX). The share value was $0.27 on4 Jan 2005 and at 1/10/08 was $5.31. This means an investment of $20000 has grown to $394,474 in 3.75 years.This is outstanding and very unusual. The shares peaked on 24/6/08 at $12.78 so had we sold thenthe proceeds would have been $949,413. Even after Capital Gains Tax of approximately $250,000 that is an incredible result.

The next question to ask is how or why did the share price grow so rapidly?Does the company have the potential for super profits? Or is the price hyped up? Even though I mostly suggest hanging on to shares for the long haul. I would be tempted to sell at $394,474 and realise these gains. It would be worth re-assessing this companyin a few months to work out if this was the right decision.

Note I just checked the price today (17/11/08) and the price had dropped to $1.88 - so it looks like my hunch to sell them back on October 1 was right. Even so at $1.88 our investment has still grown from $20,000 to $139,700.

Also note that someone could easily have been watching the prices Fortescue Metals Group Ltd (FMG.AX) in May this year and thought the upward trend was going to continue so if they invested $20,000 at the peak in June their investment is now worth $2,942.

The conclusion high risk / high return – if it’s a speculative investment and you’re looking to make some spectacular gains you have to be prepared to make some spectacular losses.