Business Finance Essay You are required to complete a 2,500 word fully referenced (APA/Harvard method) essay on the impact of Covid-19 on Australian financial markets. Please consult at least eight...

THE IMPACT OF COVID-19 ON AUSTRALIAN FINANCIAL MARKETS.
The outburst of the COVID-19, has effected everyone globally. The spread of COVID-19 pandemic with the alarming speed has affected the economic activities of the various economy. This has
ought a stand-still as many countries has imposed high restriction on the movement of people in and outside the countries to stop the spread of the virus. As the increase and rise in the COVID cases were evident in many countries, this has certainly damaged the economy to the great extent. Pandemic has weakened many economy including that of the Australia and its capital market since the emergence of the COVID during late in January 2020. The COVID pandemic has created difficulties in policies formation, the policy makers as the efforts were taken to safeguard the public and bear the adverse impact on the economies for the short period. The government of Australia has imposed many restriction on the border to control the spread of the COVID in Australia before WHO declared it to be Public Health Emergency on 30Th January 2020.
While there can be expectation of the increase in number of COVID cases in near future, affecting more people with the increase in the future wave of the COIVID as compared to that of the previous months.
Figure 1 The graph below indicates the severity impact on the Chinese manufacturing industries that can be measured nu the Purchasing Manager’s index, along with the similar amount that can be experienced in the GFC. The indication states that china has played a very powerful role in controlling the impact of COVID and has recovered the supply chain system in the country very quickly. As compared, In Australia the manufacturing is less important, other source of earnings like travel, tourism and entertainment are more likely to have impact on revenue and earnings of the nation.
Figure 1: Global Purchasing Manager’s Index
GOVERNMENT RESPONSE
The Australian Government started screening passengers a
iving from Wuhan on 23, January 2020. Within 2 days of screening first four cases of corona virus infection were detected. Various measures to close border was taken by the government including the restriction on the foreign travelers entering country. On 3rd of March, government issues a warning to the resident not to leave country for non- essential reasons. (O’Sullivan, Rahamathulla and Pawar, 2020). By the end of the March restrictions were imposed for non-citizen to enter the nation. First case of community transmission was detected on 2nd March and then there was noticed the increase in number of new cases. And the government started to introduce the strict physical distancing measures, and explained them to the citizen inconsistently and incoherently.
Banking sector in the country are under immense pressure to leniency to its customers with regards to the repayment of the loan, to reduce the interest cost for the existing loan and to make available new loans at the reduced rate. However this leniency from the banks are more complicated by the real estates, that has a major interest rates and other supportive policy. The banks are already working with the reduced debt service capacity for the consumer’s so that reduced repayment can be coincide with the price of the house. The pressure on the real estate market has already impacted the bank’s capacity for leniency to consumers taking the support from the government, the cost has been significant to the shareholders. On the subject related the government support, Australian government has the scope to increase the bo
owing level to assist the affected business. However there would be revenue loss to some of the large companies. And even for the short time the impact of the COVID would not be easy to manage. And it is believed that the support of the government in the financial terms would be more significant as expected.
IMPACT OF COVID ON AUSTRALIAN EQUITY MARKET
The Impact of COVID-19 in the equity markets around the world has worsen day by the day. Equities as is characterized as one of the instrument with the high level of volatility. In this recent pandemic has forced all the investor to liquidate it, which rather sounds to be more logical. The recent screnio is characterized by inflation and increased financial leverage by the companies which aims at increasing their earnings. (Conlon, 2021)
Impact of COVID is different in Australia as compared to that of the Global Financial Crises. Following are some of the are:
1. Economic threat: The large scale unemployment in the country during the lockdown period gas badly affected the financial events. The treat of the unemployment and the financial stress were seen in the Australia/ and were also cured to an extent with the need for monetary and liquidity response.
2. Reliant on government response: The situation of the Covid can only be dealt by the government and requires them to act and deal with the...