Stellenbosch University (SU) has for the first time won the South African leg of the CFA (Chartered Financial Analyst) Institute Research Challenge held recent.
The CFA Institute Research Challenge is an annual global competition that provides university students with hands-on mentoring and intensive training in financial analysis and professional ethics. Students are tested on their analytical, valuation, report writing, and presentation skills. They gain real-world experience as they assume the role of a research analyst.
Department of Business Management students Calum Harding, Hendro van der Merwe and Simona Coetzee (all students studying for their honours in Financial Analysis), and Jessica Steyn and Roseline Kolony (both third-year BCom Investment Management students) beat off the challenge from 11 teams representing universities across South Africa.
The teams were required to compile a sell-side research report and to present their findings to the judges for evaluation. Sell-side research is fundamental analysis on a company, typically produced by stock brokers (the sell-side of the investment industry) and then presented to their clients, typically fund managers (the buy side of the industry). This research contains analysis and insights into the subject company. The quality of the research depends on the merit of the opinions, depth of analysis and perceptions of the team. A panel of judges then awarded points for the quality in different categories. There was also a question and answer session where the Stellenbosch team impressed with their level of insight and knowledge.
The best four teams − SU, the University of Free State, the University of Cape Town and the University of Johannesburg − were then chosen to present their reports to the judges in the final on 27 October. Following the judges' deliberations, Stellenbosch was announced as the winner.
The Stellenbosch team was led by faculty team advisor Johan Steyn, senior lecturer: Investment Management in the Department of Business Management.
“This is the fourth year that we made it to the presentation round of the competition, but the first time ever that we won," said Steyn. “I am very proud of the immense effort the team put in, often under trying circumstances. Team members had to juggle the demands of their normal academic programmes in addition to putting in the hours to complete the report."
But he said the research challenge was an opportunity for the students to showcase their abilities and make a name for themselves.
“Winning is a big deal for us, as we definitely saw ourselves as the underdogs, competing against top class universities. For the students, it is a feather in their cap, and definitely something to feature on their CVs. Already, there has been interest from investment firms that want to offer them employment opportunities."
Harding said on behalf of the team: “The experience of having the chance to apply our theory practically and learn from our industry mentor and supervisor was the best part. The exposure to our industry mentor really aided our thinking about how the company should be valued and allowed us to think about how to incorporate broader and company-specific issues into our analyses, which was an awesome learning curve. The presentation was also good fun, and the preparation for it taught us to really think on our feet."
The next leg of the competition – the sub-regional round in March 2022 – will require the Stellenbosch team to present their research report again. This time there will be a new panel of judges who will evaluate both the research report and the presentation. There will also be another question and answer session.
If they make it through the sub-regionals, they will get the opportunity to compete in the regional semi-finals and, should they be successful, in the world-wide finals in New York in May 2022.
- Photo supplied. From left to right are Roseline Kolony; Hendro van der Merwe; Simona Coetzee (via computer); Calum Harding; and Jessica Steyn.
