SL gearing up for CFA Institute Research Challenge 2014/2015

Friday, 25 July 2014 00:03 - - {{hitsCtrl.values.hits}}

Local research challenge kicks off
Singer PLC selected for investment case

Teams from six universities receive top briefing on competition

By Shabiya Ali Ahlam Gearing up the next generation to be equipped with best practices in equity research, the Chartered Financial Analyst (CFA) recently kicked off its 2014/2105 local research challenge. The CFA Institute Research Challenge being a global competition popularly known as the ‘Investment Olympics,’ Sri Lanka will participate for the ninth consecutive year to promote best practices in equity research amongst young budding finance professionals.

Real-world experience The competition provides university students with hands-on mentoring and intensive training in financial analysis where they will gain real-world experience as they assume the role of a research analyst and are tested on their ability to value a stock, write an initiation-of-coverage report, and present their recommendations. The students will work in teams to research and analyse a publicly traded stock, sometimes even meeting face-to-face with company management. Each team is expected to produce an initiation-of-coverage report on their assigned stock with a buy, sell, or hold recommendation and will be asked to present and defend their thesis to a panel of industry veterans. The winner from each local competition advances to one of the three regional competitions hosted by CFA Institute, in the Americas, the Asia Pacific and the Europe, Middle East, and Africa regions, and then to the Global finals where one team will emerge as global champion. While last year the Asia Pacific Regional and Global Final were held in Singapore, this year former will be held at the Philippines and the finals will take place in Atlanta, Georgia.

Local competition kicks off With local CFA institutes responsible for selecting teams to represent the country at a global level, the Sri Lanka institute yesterday officially started the local competition having called for applications from universities earlier this year. As the previous year, six universities have put forward their team consisting of the best students to be part of the challenge. The teams being handpicked by the departmental heads of universities, institutions taking part this year are, University of Colombo, University of Kelaniya, University of Sri Jayewardenepura, University of Moratuwa, Asia Pacific Institute of Information Technology (APIIT) and Royal Institute (RI). The participants received a comprehensive briefing at the Securities and Exchange Commission (SEC) premises on the rules of the competition and were introduced to Singer PLC, the company selected for the investment case. Singer Chief Executive Officer Asoka Peiris, together with senior members of the company’s finance department, gave a comprehensive overview of Singer, its business, its industry and future outlook. In addition to the top briefing from CFA and Singer, the participants was also addressed by the local winners of 2013, University of Colombo, where they shared with participants their learning and experience on the CFA Research Challenge. Last year the local team proceeded up to the semi finals of the Asia Pacific Regional.

Global learning exposure Speaking to the Daily FT, CFA Director and Research Challenge Chairperson Zaff Jeevunjee said the competition aims to improve the standard and analysis of research conducted by budding financial professionals. “The competition will help them really get hands-on experience in the industry. During the competition they will be exposed to a lot of global learning. The CFA wants the participants to be highly conscious in the way in which they do their research and ensure that they do it the right way. It’s about professional diligence, sticking to code of ethics, being conscious about following the right rules, be it the capital market rules or the competition rules,” said Jeevunjee.With companies such as Dialog Axiata, Tokyo Cement, Caltex, Asia Hotels and other top players across diverse sectors being selected for the competition every year, Jeevunjee shared that the companies for the investment case are selected based on their investor relations and willingness to interact. “The CFA selects companies which we think are interesting for the teams to be able to come up with an interesting story for their reports and presentation. This benefits the company as well since their story will be shared at an international platform, which is mileage,” he said. The 2013 CFA Research Challenge saw the participation of 3,700 students from 825 Universities representing 58 countries. Pix by Upul Abayasekara