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Round 1 - Finance Accelerator Research

The document provides an overview of 5 stocks - Alibaba, HSBC, BP, Microsoft, and Volkswagen - for investment purposes. It outlines the investment objectives of generating return and beating a benchmark index within constraints. It also summarizes the business, share price performance in the last year, and analyst outlook for each of the 5 stocks.

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Zahin Adib
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191 views4 pages

Round 1 - Finance Accelerator Research

The document provides an overview of 5 stocks - Alibaba, HSBC, BP, Microsoft, and Volkswagen - for investment purposes. It outlines the investment objectives of generating return and beating a benchmark index within constraints. It also summarizes the business, share price performance in the last year, and analyst outlook for each of the 5 stocks.

Uploaded by

Zahin Adib
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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FINANCE ACCELERATOR

ROUND 1 RESEARCH

www.amplifyme.com
ASSET MANAGER: BUY-SIDE OBJECTIVES

● Investment Strategy: Global Equity, Long Only, $20 million capital.

● Client Profile: 40 yrs old founder/CEO of a successful tech


company. Moderately high risk appetite.

● Investment Time Horizon: 30 minutes simulation time will be


equivalent to investing through a fictitious 6-month time period.

● Investment Objective: To generate as high a return on investment


as possible whilst beating the underlying benchmark index. The
benchmark index is equally weighted across all 5 stocks.

● Investment Constraints: The aim is to invest all of your client’s


$20million cash across the 5 stocks. A diversified portfolio spreads
the risk. However, do not break your max stop loss limit of -$500,000
in any one position.

● Execution: Avoid large market impact on the exchange. Achieve


more competitive prices by trading through the investment banks.

INV BANK SALES TRADER: SELL-SIDE OBJECTIVES

● Client Relationships: Communicate regularly with your clients in


order to form and maintain strong relationships.

● Maximise Commission: Facilitate as many client trades as you can.

● Competitive Prices: Provide tight bid/offer spreads for clients when


they ask for quotes. Bad/wide spreads will mean clients will be
unlikely to trade with you.

● Manage Risk: When a client accepts a trade with you, the bank will
automatically be put into the opposite position. Trade out of these
positions of risk by using the exchange or finding another client.

● Manage Market Impact: When trading out of risk positions on the


exchange, break positions up into smaller execution sizes to avoid
PnL losses through market impact.
MACRO OVERVIEW
Last year was an unprecedented period for the world as it endured one of the worst health crises in
history. The economic system has been through a unique upheaval as Governments around the
planet forced consumers into lockdown. Global markets have witnessed a huge divergence with
high street retail, hospitality and travel sectors being severely hit. However, in contrast the
technology sector has witnessed an unprecedented spike in demand which has driven tech stocks
to new all time highs.

As we enter into a new year analysts are monitoring closely how Governments and central banks
may act further to sustain the recovery. Question marks remain over whether there is any room for
further government stimulus spending with borrowing levels already at record highs. There are also
uncertainties as to what more central banks can do to boost economic activity with many banks
having cut interest rates close to zero already.

Alibaba (BABA)

Alibaba Group: Chinese multinational tech


company specialising in e-commerce, retail,
internet and technology.

The last 12 months has seen the Alibaba


share price finally break above the stubborn
$200 resistance level with price then quickly
rising to test the $300 handle. This
acceleration higher is a function of global
consumers being forced to increase their
online spending due to Covid lockdowns. As
we enter the new year analysts are hoping
for new product offerings to take Alibaba’s
business to the next level.

HSBC

HSBC: British multinational banking and


financial services organisation. Over 7000
offices in over 80 countries but almost all of
its recent profits have come from its Asia
business, especially Hong Kong.

Last year the share price broke below key


support at $30 and has trended sharply
lower as a result of persistently low interest
rates and the recent pandemic crisis
leading to a spike in loan defaults and a
drop in consumption.
British Petroleum (BP)

BP: Multinational oil and gas company, one of


the world’s seven oil & gas “supermajors”.

BP’s share price took a major drop last year


with more than half of its value being wiped
out. The downside pressure was driven by both
a collapse in oil demand due to the global
lockdowns implemented to stop Covid-19
spreading, but also an increase in supply as
OPEC and Russia failed to agree on extending
production cuts. Analysts are hoping for an
agreement to further cut production at their
next meeting.

Microsoft (MSFT)

Microsoft: US multinational tech company.

The company has enjoyed a fantastic growth


trajectory with the share price more than
tripling over the last three years. Like other
technology companies, the virus pandemic
has meant that its products and services are
in even greater demand with, for example,
schools shifting to online learning. Analysts
expect the growth story to continue but are
also looking for additional revenue streams to
be introduced for the business to sustain it’s
recent rate of growth.

Volkswagen (VW)

Volkswagen: German automaker who owns


car brands such as VW, Porsche, Bentley,
Bugatti, Seat, Audi and more.

Their share price took an initial sharp


correction lower as the world went into
crisis lockdown last year, but this correction
has been recovered surprisingly well in
recent months as record low interest rates
continue to make financing deals very
attractive. Analysts are now looking for
further signs that the global economic
rebound can be sustained before the share
price can return above $30.

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