ADBA - ERCBA214 Managerial Finance Group Assignment (Groups of 2-4) (Report 20%, Presentation 10%) Submission Deadline: 18th

th November 2011
You have just joined ABC Pte Ltd, a company registered in Singapore, as their Finance Director responsible to maximise their investment returns and manage their financing and cash flow needs. ABC has a strong cash reserve of SGD 30 million and the company CFO has asked you and your team to prepare a proposal on how best to invest in financial instruments available in Singapore. The following guidelines have been given: a) At least 50% need to be invested in fixed-income products (bonds, deposits, etc). b) Because of the current financial crisis in US and Europe, the CFO felt that sectors that will likely to maintain predictable income and consistent dividends are the transport and telecommunication sectors. He would like $10 mil to be invested equally in these 2 sectors in the Singapore stock market. It is anticipated that ABC will require AUD $1 mil in 60 days and a further $4 mil in 150 days to complete an acquisition of an Australia distributor whom currently distribute ABCs products. The company require a free operating cash float of $2 million every month to operate. Prepare your proposal (written with supporting documents/charts) and presentation (PowerPoint slides) (assuming you will be presenting your recommendation to the company board. Hints: a) Explain why the product(s) is/are chosen and forecast the returns of investing in this/ese product(s). b) Compare the various products available and support your recommendation with appropriate calculations. c) For fixed income products, consider bonds, preference share, foreign currency deposits. d) For equity/securities (shares) investment, compare the various stocks available in each sector looking at their historical pricing, dividend payment history, comparative ratio(s) and underlying fundamental of these companies when making your selection. e) Select not more than 3 options in each category. f) The company appetite for risk is neutral with a preference for a balance portfolio.