Security Analysis and Portfolio Management (FIN 450)

Prince Sultan University

Security Analysis and Portfolio Management (FIN 450)

Group project: Portfolio Management

Due Week 13 (26^th November, 2020)

1. CONTENT OF PROJECT REPORT

Each project group is required to submit a project report on the 26^th of November 2020. Groups will be required to submit their written report through Moodle. This piece of group project is worth 20 points which amounts 20% of your final grade. The project report will be graded out of 13% and a poster presentation out of 7%.

Students are required to form a group, consisting of 3-5 members and register their names in Week 3 to the instructor. Your team will play the role of a financial planner who will propose a personal portfolio for a client.

1. INSTRUCTIONS

Please create your account through https://www.tadawul.com.sa/Resources/VirtualTrading/VirtualTrading_en.html

Steps:

1. Create account/register
2. Choose main market
3.  Use your SAR100, 000 to buy stocks that you have picked up based on your fundamental analysis.
4. Trade your shares in 1 month and apply 5-days moving average technique (Technical analysis) to learn the pattern of the prices for your buy and sell strategy.
5. Along these 1 month prepare your log book on selling and buying shares. Every week you must have at least 2 transactions.
6. After 1 month close your position by selling all your shares.
7. Prepare your report and make the poster presentation of your finding and security analysis strategy of your investment.
8. Use Bloomberg to find all the necessary information.

1. REPORT TEMPLATE: Written Report: 13% of the Total Mark

The report should have a table of contents and be organized into the following sections.

• Investment Goals of your client (Investment Statement Policy)
• Asset Allocation Model
• Investment Decisions – percentage of investment in different industries and stocks plus Bills
• Portfolio Records and Monitoring – log book

1. Investment Goals (1%)

In this section you will state the investment policy statement (IPS) that applies to your client.

Assessment criteria:

• Has the team stated the policy clearly in terms of return objectives and risk tolerance of the client?
• Has the team properly referenced all sources? (Follow the investor process in chapter 22)

1. Asset Allocation Model (1%)

In this section, you use the investor profile to develop a capital allocation model dividing the investments into money market and equity. Explain your choice.

Assessment criteria:

• Has the team shown an understanding of investor’s risk tolerance to form the capital allocation decision?
• Has the team offered clear and objective evidence to support their capital allocation?

1. Security Selection (4%)

This section recommends specific investments to be part of the asset allocation for the portfolio. These must be real investments and the costs of acquisition should be identified. There is no limit on the number of investments chosen but each should be chosen for a specific reason.

Assessment criteria:

• Does the team have specific investments – name, institution, costs, etc.?
• Does the team offer reasons why one investment was chosen over another?
• Is there diversity within the category and a reason for that diversity?
• Do one or more of the choices reflect research and a desire to try something different and less traditional?

Method in choosing your stocks: (Fundamental analysis)

Fundamental analysis method used to choose companies- example use EPS, P/E Ratio, growth analysis for revenue/sales, asset, liability and new investment or equity. Add up some   macroeconomics or industry outlook such as development in particular sectors or increasing in GDP in particular country.

1. Company name
2. Background of company
3. Fundamental analysis for each company
4. Portfolio Records and Monitoring (4%)

This section recommends a method by which the client can record and monitor his or her investments. It also includes detailed instructions and samples of how to use the program and evaluate the reports generated by the program.

Assessment criteria:

• Does the team include evidence of program use: how it handles transactions, reports, and calculates returns?
• Has the team included printouts to support their use?

Technical Analysis

1. Log of transaction for 1 month
2. Apply moving average method to the stock prices to indicate buy or sale of the stock
3. At the end of one months close all your position by selling all shares and T-bills and calculate your return

E: Results of close position (3%)

Analyze your portfolio and calculate the return and profit of your investment. Justify your profit/loss position. Make your conclusion and lesson learned from this project.

1. PROJECT GUIDELINES

Students are required to submit a soft copy of your report for the instructor’s record. Note that plagiarism is not compromised. Instructor may check the percentage of plagiarism using the turn in it system in Moodle.

In the case of your work is found to be 25% plagiarism the instructor has the right to give ZERO mark for that particular work or up t o the instructor’s discretion whether to give a second chance for students to resubmit the work with a penalty. Late submissions will be subject to mark deductions.

The penalty mark is given as follow:

To be acceptable, your paper must

• Must be typed, 1.5-spaced, and have 12-point Times New Roman font.
• Be submitted on the due date.
• Have a cover sheet or title page with your name in the upper right hand corner, the title of your paper approximately centered on the page and toward the bottom of the page the name of the subject, instructor’s name and the date of submission.

Good Luck

Dr. Lama Alkayed

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