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Capital Markets & Investments. This reports main aim is to experiment my knowledge upon the stock market as well as assessing the results of my investment portfolio. For this project I have been given theoretically 100,000 to invest

Extracts from this document...

Introduction

Investment Portfolio Capital Markets & Investments Contents 1. Introduction to the project 2. Compilation of my investment portfolio 3. Summary of description and performance of assets 3.1 British Airways Plc (BAY.L) Brief Background Shares Selection Motive Performance of Shares 3.2 Experian Group Ltd (EXPN.L) Brief Background Shares Selection Motive Performance of Shares 3.3 Lloyds TSB Group Plc (LLOY.L) Brief Background Shares Selection Motive Performance of Shares 3.4 Marks & Spencer Group Plc (MKS.L) Brief Background Shares Selection Motive Performance of Shares 3.5 Tesco Plc (TSCO.L) Brief Background Shares Selection Motive Performance of Shares 4. Risk & Return Analysis 4.1 Risk Grades - Investment portfolio analysis 4.2 Return analysis 5. Portfolio performance measurement 6. Conclusion 7. Bibliography 8. Appendix 1. Introduction This report's main aim is to experiment my knowledge upon the stock market as well as assessing the results of my investment portfolio. For this project I have been given theoretically �100,000 to invest in the stock market. I was asked to chose shares, gilts, bonds and commodities to invest upon which would sum up to �100,000 (close enough to it). I have chosen to investment in shares of five different companies for this project. I have chosen to start a portfolio both on www.iii.co.uk and yahoo finance. This is because I prefer yahoo finance's graphs to Interactive Investor Trading but iii's portfolio is much simpler than of yahoo finances. I successfully started investing on the 2nd of April 2007and thereafter I recorded my results each day till 11th of May 2007. This was an uneasy time to start investing as I was shocked with John Stepek's article regarding China's crash effecting the FTSE 100 (28.02.07), he stated that a 9% fall in China's hugely overheated stock market managed to trigger knock-on sell-offs in markets across the world. The FTSE 100 ended the day down 2.3%,148 points lower, while the Dow Jones lost a hefty 3.3% to close 416 points lower. ...read more.

Middle

23 22 http://www.just-style.com/article.aspx?id=97096 23 http://en.wikipedia.org/wiki/Bryan_Ferry 3.5 Tesco Plc (TSCO.L) 3.5a Brief Background Tesco plc is a UK-based international grocery and general merchandising retail chain. It is the largest British retailer by both global sales and domestic market share, is the world's third-largest grocery retailer,[2] and is the fourth-largest retailer behind Wal-Mart of the United States, Carrefour of France, and The Home Depot of the United States. Tesco's revenue for the 52 weeks to 24 February 2007 was �46.6 billion. Group profit before tax was �2.653 billion for the 52 week period and �2.648 billion after tax. Across all categories, over �1 in every �8 of UK retail sales is spent at Tesco. The company has a total market value of about �36,761.71m (April 2007).24 3.5b Shares Selection Motive I chose to buy 2,306 (units) shares of Tesco because of the following reasons: * Tesco's share of the UK grocery market in the 12 weeks to 25 February 2007 was 31.25%. 25 * Tesco has made a very public commitment to corporate social responsibility, in the form of contributions of 1.87% in 2006 of its pre-tax profits to charities/local community organisations. This compares favourably with Marks & Spencer's 1.51% * Tesco has a P/E ratio 23.4 and * Tesco has a dividend yield 2.1% which is much higher than J Sainsbury which holds 1.4 the industry currently holds 1.15 therefore Tesco is very well off * The grocery market is expanding at record rates, the latest data from TNS Worldpanel has revealed, with the UK's top three supermarkets increasing their market share. 26 * The overall market has expanded by 6%, with the top three supermarket chains posting strong growth and lifting their combined share by 1.5% in the 12-weeks to 22 April. Tesco, the market leader, increased its share by 0.6% to 31.4%. Asda's share was up of 0.5% to 16.8% while Sainsbury's share grew 0.4% to 16.4%. ...read more.

Conclusion

Lloyds TSB's announcement of its employees sharing in its �252m windfall payout from the company's shares and bonus schemes will make the company more productive because of greater motivation as well as higher employment rate and lower staff turnover. Although I am currently happy with British Airways shares I feel that because of the increase in price due to oil prices increasing will mean less consumers taking BA and switching to an alternative airline and when that happens I will be there to invest in that particular airline. Another problem is although BA has made a deal with Rolls-Royce which consist of the airline using their high power engines in their airline I feel that although the engine is more powerful, wouldn't that also mean more fuel consuming thus increase of even a higher price than the one now? I think so. In final conclusion since the FTSE 100 is on the rise (yahoo finance)the future looks good for the UK as states White (2003) states that the UK industry is now more of a financial and services industry41 rather than production e.g. China. And It is because of this I have decided to invest only in the UK and not too many of the foreign markets unless I know that they are stable. Currently analysts compiled a sector analysis from the highest performing sectors to the lowest and you can see this in the appendix 1.1 and form this table I have decided in the future to invest in oil & gas, telecommunications and beverages industries as they are right at the top of the list and I believe that they will stay there for a long time. With the help of www.iii.co.uk I have also decided that after selling Experian shares I will purchase shares in Sanctuary Group (The) PLC 44.44%. This is because if you review the table 1.2 in the appendix you will see that it is up 44.44% which is a huge figure and its past success has been steady and on the rise. 41 White, J, Investing in Stocks and Shares 7. ...read more.

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