Background

Assume that you work as a senior equity analyst in a financial services firm. Your job is to provide advice and wealth creation strategies to private and institutional investors and corporate clients throughout Australia. As such, you investigate a number of publicly listed companies in Australia.

These companies are:

1. News Corporation (NWS.ASX)

2. Harvey Norman Holdings Limited (HVN.ASX)

3. Navitas Limited Equity (NVT.ASX)

4. Webjet Limited (WEB. ASX)

5. The A2 Milk Company Limited (A2M. ASX)

6. Cooper Energy Limited (COE. ASX)

7. Bank of Queensland Limited (BOQ.ASX)

8. Sigma Healthcare Limited (SIG. ASX)

9. Transurban Group (TCL. ASX)

10. Spark Infrastructure Group (SKI. ASX)

Task

As part of your job, you prepare reports for the benefit of your clients. Perform the following tasks and write a report to present your research findings.

Identify and describe a recent company (from the list provided above) announcement that is expected to influence the price of its stock. The company announcement must be made after Monday the 10th of August 2020.

Conduct your own investigation, regarding the market reaction in relation to the announcement you have identified. Collect and use relevant information such as company share prices, market index data, risk-free rates and market capitalisation as supporting evidence if applicable.

Is the observed market reaction as per your expectation? This discussion should be related to, and based on, your understanding of the Efficient Market Hypothesis (EMH).

Based on your analysis and findings, provide your own comments and critical thinking on the article: The theory of stock market efficiency: Accomplishments and limitations by Ray Ball (available in the eReadings). The report should consist of the following sections:

Introduction including some theoretical aspects as indicated in the above notes.

Discussion including the announcement affecting one of the followed companies and the effect of the announcement on the share price whilst utilising theoretical knowledge.

Conclusion including informative results and any recommendations to investors.

Appendixes including evidence of using IRESS data. For example, the use of empirical evidence in graphs and tables in support of your discussion and findings, and brief descriptions of the followed company and the identified announcement.