HND 金融专业 GU 3（第二篇第三部分）.doc

3. Evaluation ReportIn the evaluation report, I will discuss the performance of the stock market in general over the chosen period, with particular emphasis on worldwide economic factors, political factors and legal factors and how these factors influenced the FTSE100 index and all share indexes. Then, I will compare the performance of each company to that of the sector in which the company operates. After that, I will analyze the trend of the stock price of the four companies chosen based on the weekly historical figures of this chosen period combining the relative news recorded and give the trend expectancy of the stock price. 3.1 Marco economy Influenced by the financial crisis and American sub prime crisis, the European Union such as Greece and Ireland has suffered the financial disaster Therefore, the European Minister has to collect the monetary fund to rescue this debt crisis. The main reasons of the debt crisis are the citizens over consumption and the countries high taxation. This following news has told us clearly about the Ireland debt crisis. Ireland had a financial crisis recently. “European ministers are expected to sign off on an 85 billion euro ($112.7 billion) rescue for Ireland on Sunday, making it the second euro member after Greece to require a bailout in the face of a crippling debt crisis. Britain is not part of the euro zone but could be asked to contribute at least 6 billion pounds ($9.5 billion) under the European Financial Stabilization Mechanism, leaving aside any bilateral aid.”1( ). Absolutely, this serious problem will affect the fluctuation of the shares price in Europe which was shown in the FTSE100 index below. Euro crisis bring a phenomenon that people were all less confident to the whole stock market. Therefore, the stock price sharply decreased at that period. 3.2 FTSE 100 Index This table shows the fluctuation of FTSE 100 and FTSE all share Index from 20th, Nov 2010 to 5th, Mar 2011.From the two curves we can see, compared to week1, the share index dropped slightly on week 2 from 5732 to 5668. The main reason was the Euro Zone crisis, which largely lowered the investors confidence. So the whole stock market was in recession. However, from the period week 2 to week 6, the share market had a great change. FTSE 100 and all share indexes had a sharp increase. The following news may help to state the reason. “European central banks to increase purchase of government bonds in countries such as Italy and Ireland and keep interest rates unchanged at 1% to ease the crisis facing the euro area.”2 (http: /www. )In order to stabilize the stock market, EU government has to take different measures to rescue this Euro crisis. After these measures were carried out, the whole stock market grew steadily from week 2 to week 7. The second news is that U.K. November Home Prices Fall for Fifth Month on Weaker Demand. “U.K house prices fell by one fifth in December as demand for property dropped the most in almost two years”, Home track Ltd. said. The average cost of a home fell 0.8 percent from October to 155,000 pounds ($242,900), the London-based property researcher said in an e-mailed statement today. Demand for homes, measured by the change in new buyers registering with real-estate agents, fell 4.3 percent, the biggest decline since January 2009. ”3 ( )We all know that stock market and estate market are negative correlation. That the estate market is in recession for long time in UK will result in the stock market bulling. That is one of the reasons why the FTSE 100 shows an upward tendency. Experienced one week from week 6 to week 7, FTSE 100 index had a relative drop. The figure changed from 6008 to 5899. But compared to week 1, it was still higher. After week 7, the average stock price went up again and had a slightly fluctuation in the following weeks. This news can support the fluctuations Interest rates need to get back to a normal level of about 5% says MPC member Paul Fisher“Mortgage borrowers need to brace themselves for much higher interest rates, a member of the Bank of Englands interest rate-setting Monetary Policy Committee has warned.Paul Fisher, who is also the executive director of markets at the Bank of England, said people need to appreciate that interest rates will go back to “normal levels” eventually.“We hope people are aware that interest rates at some point will go up again and that they will head back to a normalized position,” he told the Telegraph newspaper.When asked, Fisher said that a normalized rate would be about 5%. Interest rates have been set at 0.5% since March 2009, meaning big reductions in payments for those home owners on variable mortgages.The Bank estimates that two thirds of mortgage borrowers are currently on variable rates. It has been reluctant to raise interest rates because of the impact this could have on this group and the housing market, but the mood may be changing.“We have to bear in mind savers have being doing particularly badly while borrowers have been benefiting. We cant favor one group over another,” Fisher said. ”4 () This news tells us the lender will pay more to the bank in the future; this policy will increase housing loan expenditure, which will inhibit the real state speculator to a certain extent. Then, some speculator will turn their investment into stock market. More investors invested in the share market, the share price will be higher than before. Britons will have to work 149 days next year to pay off their tax bill, according to a leading think-tank “Britons will spend the first five months of 2011 paying off their taxes, according to economic think-tank the Adam Smith Institute.Its so-called tax freedom day, when people start to earn for themselves, will be 30 May in 2011, three days later than this year because of the VAT increase from 17.5% to 20% on 4 January.Tom Clougherty, the institutes executive director, criticised the impending rise in VAT, claiming people in the UK were already desperately overtaxed.The fact that we spend almost five months working for the state and only seven months working for ourselves and our families is a shocking indictment of big, wasteful government.As well as hitting every household in the country, the VAT hike is going to dent consumer confidence and put a dampener on our economic recovery”, he said.The worst year for “tax freedom” occurred in 2006 when people needed to work until 4 June to keep the money they earned.The institute calculates the date by comparing tax revenue with net national income. Next year that figure is expected to reach 40.8%, which equates to 149 days”5 ( ) The tax increased means that the level of the citizens consumption in UK will decrease. This will have a negative influence on the stock market. People will not have sufficient money to invest in the stock market and result in the stock price decrease. “LONDON, Jan 26 (Reuters) - Britains FTSE 100 index is seen gaining on Wednesday, following a speech in which President Barack Obama stressed the need to lower corporate tax rates, and after Wall Street erased losses on general optimism about earnings.The UK blue chip index looks set to add 27 to 29 points, or 0.5 percent,According to financial bookmakers, it closed down 26.14 points, or 0.4 percent, at 5,917.71 on Tuesday after a shock 0.5 percent contraction in UK GDP in the last three months of 2010.Bank of England Governor Mervyn King said on Tuesday that British inflation is likely to rise towards 5 percent in the coming months, but any decision to raise interest rates will be based on longer-term goals.” 6 ()After Obamas speech about lowering the corporation tax, FTSE 100index increased. Due to the corporation tax would be decreased means the company could generate more profit than before. So the investors may have a good yield when buying the companies shares. 3.3 Sector index of four companiesIn the four companies chosen, Compass Group belongs to service industrial company. TESO, PLC and Imperial Tobacco belong to one sector which is consumer goods. HSBC belongs to financial sector. Overall, influenced by the debt crisis in Europe, most of the sector showed a downward trend at that period. I will illustrate them in details.3.3.1 Industrial sector This graph shows the sector index of Compass Group. This curve describes the service company had an ascendant trend from week1 to week9. In week 9, the index reached a peak at 4901 point during this period. However, the index demonstrated a downward trend after week 9. Especially in week 15, it sharply decreased from 4771 to 4583. The following factors will illustrate the reason of the fluctuations. l Apax set to pay $8.5 billion for Danish cleaner ISS“Private equity firm Apax is in exclusive talks to buy Danish cleaning company ISS for $8.5 billion including debt, a person familiar with the situation said, flagging what could be Europes largest buyout since the credit crisis.The owners of ISS ISSHG.UL - Goldman Sachs (GS.N) and Swedish buyout firm EQT - have been considering an initial public offering (IPO) or a sale of the company, one of the worlds largest facilities services firms which employs more than 500,000 people. Apax entered exclusive talks after beating bids from rival private equity firms.Reuters reported in November that Apax was preparing a bid for the business, as were a consortium of Blackstone (BX.N), Bain Capital, Nordic Capital and Clayton Dubilier & Rice, and a team of CVC CVC.UL and Apollo APOLO.UL. Britains Daily Telegraph newspaper first reported the exclusive talks on Wednesday.Goldman Sachs private equity arm and EQT bought ISS in a leveraged buyout in 2005. That deal valued the business at $5.3 billion including debt, according to Thomson Reuters data.Apaxs maximum equity investment in deals is around 600 million euros, leaving it over $2.5 billion to find from co-investors with about $5 billion to be funded through debt, the person said. The group has a couple of months to round up the investment, the person said.Apax counts Singapores sovereign wealth fund GIC, Chinas CIC and Future Fund of Australia among its investors, as well as Canada Pension Plan Investment Board and Alpinvest in the Netherlands.” 7 ()This acquisition made the whole service sector market come alive, because it was Europes largest buy-out since Euro crisis. l . The second news is from another service company called Green Planet Group. “Green Planet Group, Inc. (OTCBB:GNPG - News) is based in Scottsdale, Arizona and engages in ongoing research and development to create products and services that enhance our environment. The Companys revenues are currently derived from the production and distribution of fuel-based energy conservation and clean-air products, as well as through the placement of members of the growing ranks of the unemployed into meaningful green collar careers.SCOTTSDALE, Ariz., Dec. 31, 2010 (GLOBE NEWSWIRE) - Green Planet Group, Inc. (OTCBB:GNPG - News) announces today that its senior management team has purchased 5,500,000 shares of restricted common stock at a cost of $.02 per share. The financial impact of these purchases reduces the debt owed to management by $110,000 and therefore will have a positive impact on profits.We are convinced that our stock is significantly undervalued, stated Mr. Lonergan, and we believe that although our Company has struggled through one of the most difficult financial eras in American history, we are convinced that in the next twelve months revenues will grow significantly and Green Planet will become profitable. Mr. Marshall added, We expect that as the Company improves its overall performance the result will be a positive impact on shareholder value. 8 (/)This news had a positive impact on the whole service industrial sector. Because the management team had purchased the common stock, so the debt of the company will be reduced. It means that the company is healthier than before, which will attract more potential investors. 3.3.2 Consumer goods SectorThese two graphs below show the sector index of consumer goods for the companies Imperial Tobacco and TESCO.The most highlighted point was both graphs reached the highest point on week 6 on Christmas. In UK, Christmas is as important as Spring Festival in China. People usually purchase tons of food to be stock. Absolutely, this sector index of food kept going up until Christmas finished just like that we see from the charts. This news exactly proved this statement.l Five million Britons to shop online on Xmas Day Dec 23 (Reuters) - Almost 5 million Britons are expected to go online on Christmas Day and spend over 150 million pounds ($232 million) as they look to grab bargains and beat a rise in January in VAT sales tax, a retail group said on Thursday.9 ()After the Christmas, there are some waves. The factors are:l . Commodities depress FTSE, BP falls on pipe closure“LONDON, Jan 10 (Reuters) - Commodity stocks dragged Britains top share index down on Monday, with BP (BP.L) lower after leaks forced the shutdown of one of the United States key oil arteries.Capital Shopping Centres Plc (CSC) (CSCG.L) dropped 2.3 percent as investors feared U.S. Company Simon Property Group (SPG.N) would abandon its pursuit of the firm after CSC cut the price it is offering for the Trafford Centre by 8 percent, boosting the British mall owners defense against its U.S. peer”10 ()l Imperial surprise sales rebound drives shares 7th, JAN“LONDON, Feb 2 (Reuters) - Britains Imperial Tobacco (IMT.L), the worlds fourth-biggest cigarette maker, surprised investors with a return to volume growth in the last quarter of 2010 driving its sales higher due to emerging market growth.” 11()The first news illustrated that the overstock and competitors which made the sector index decreased. The second news talked about the special companies of consumer food sector had a growth in return which will drive the line up.3.3.3 Financial sector The final sector index is the financial sector which has the most closed relatives with the Euro crisis.Euro crisis had a big negative effect on the financial sector index. We can see from the chart from November to December, the figures were all below 4900 points. Apart from this, some other factors also bring us the reasons of the obvious changes From week8, the index soared directly to 5011 points, this may related to:l . UK govt will not limit banks bonus pools Jan 10 (Reuters) - The British government will not set limits on the total amount of bonuses banks can pay their staff this year, a spokesman for Prime Minister David Cameron said on Monday.The Conservative-Liberal Democrat coalition government has come under pressure to curtail big bonus payments at banks which needed significant state support during the financial crisis, such as RBS (RBS.L) and Lloyds Banking Group (LLOY.L). UK Financial Investments, a government body set up to represent taxpayers interests in banks, is in discussions with RBS and Lloyds over bonus payments, Camerons spokesman said.” Weve made a broad statement which is about the need to see some restraint and some responsibility from the banks, but we are not going to set bonus pools for individual banks, the spokesman told reporters.Earlier on Monday, the opposition Labor party called for the reintroduction of a one-off tax on bonuses which raised about 3.5 billion pounds ($5.44 billion) for the Treasury last year and said not enough was being done to clamp down on excessive behavior in the banking sector. The coalition government has replaced that bonus tax with a levy on balance sheets which is estimated to yield about 2.5 billion pounds a year.We will set policy to achieve the maximum sustainable revenues from that sector, Camerons spokesman said. 12 ()This policy could make the banks have more autonomy to allocate their bonus and dividend. The tax was reduced, the staff will have more money to consume and invest, which positively influenced the whole sector index. 3.4 Companies share price fluctuation 3.4.1 Compass Group Main business The company is a global market leader in providing food and a range of support services to customers in workplace, schools, colleges, hospitals, at leisure and in remote environments.Compass Group PLC provides contract foodservice and support services to its clients worldwide. It offers various foodservice solutions ranging from free-flow restaurants to formal dining, hospitality services and a range of support services, such as cleaning, building operations and maintenance, business and office, logistics and transport, and senior living, sports and leisure, business and industry, education, offshore, and defense sectors. It offers its services in the United Kingdom, Ireland, Continental outdoor, project management, and security services. The company also operates fine dining facilities and provides fine dining services. Compass Group serves healthcare Europe, North America, South America, the Middle East, Africa, central Asia, and the Asia Pacific. The company was formerly known as Granada Group plc and changed its name on July 28, 2000. Compass Group PLC was founded in 1941 and is based in Chertsey, United Kingdom The movement of shares over the chosen period and relative factors From the chart we can see that on 20TH, November 2010, with the quoted price 530.50p that is the lowest