International Finance 3rd Annual FNB Securities Trading Game

The winning SU team. From left to right: Hylton Hollander (Lecturer), Maximillian Reinke, Reinier Smit, Grant Rossiter (FNB Securities), Maseabata Khanya, Jason Clark, Zanele Zaza (FNB Securities), Richard Levesque (FNB Securities). Absent: Ludwig Steding and Antonia     Westphalen

This year’s International Finance trading simulation saw postgraduates from Stellenbosch University and the University of Western Cape awarded R36 000 worth of First Rand shares. Nine teams went head-to-head in a trading experiment using a live FNB Securities trading simulator. Teams invested a hypothetical US$100 000 in real-time foreign exchange and global stock markets, with the goal of achieving the highest return over 3 months. The SU winning team members received an FNB Securities stock broking account at zero cost plus R4 000 worth of FirstRand shares. The objective of the exercise was for the students to test economic theory in the real world, understand international macro-developments, and encourage an investment mind-set. This year, students had to navigate some unusual market conditions from Trump trade wars to a sharp sell-off of historically high-performing FANG stocks (Facebook, Amazon, Netflix, Google).

FNB Securities

The first Intervarsity trading challenge was a great success and it’s been another fantastic opportunity for FNB Securities to engage with the talented International Finance postgraduate students from Stellenbosch University and the University of the Western Cape. In what was nothing short of a remarkably challenging investment environment, all the teams showed grit in the search for profitable and unique trading ideas. Well done! Currency trading was again a theme amongst the competitors this year, albeit not an enormously profitable one as the FX markets were incredibly volatile this year as political noise drove FX moves. Again, well done to Dr Hylton Hollander who worked tirelessly to bridge the divide between academia and office. Well done to all the students involved and remember, it’s not important to win this competition, but it’s important to learn through the doing that counts. Well done to the teams. We look forward to next year’s competition, which could look to include a 3rd University... – Richard Levesque (FNB Securities)

The Winning SU Team

From an investor’s perspective, the first half of 2018 proved to be challenging, with a lot of market disturbances throughout. Donald Trump, the President of the United States, proved to be at the forefront of this uncertainty, together with occurrences such as the Facebook privacy controversy. This cost investors dearly, and we knew we would have to stretch our $100 000 as far as possible. We decided each member of the group would be allocated $10 000, and the rest would be spent as a team. Having a highly diversified portfolio counted in our favour. The inclusion of group members from abroad, as well as local, meant that each member had different insights and invested in stocks which they saw fit. After seeing considerable setbacks, experienced by all teams involved, we decided to adjust our portfolio to take a more conservative approach (i.e., to hold ETFs and other “safe” instruments) with minimal trading. Trying to beat the market in such a short, uncertain period proved costly. In the concluding weeks and saw our portfolio reach number one in the concluding weeks. We, as a group, really enjoyed the practical experience. Learning more about how the market functions in the process of applying our economic knowledge. – Reinier Smit and Jason Clark (SU)

The Winning UWC Team (3rd overall)

The FNB trade simulation game was a great experience builder for me and my team. We learned a lot along the process, especially how markets can be politically influenced and how stocks fluctuate on a day-to-day basis because of expectations in the market. We did not adopt a specific strategy. Instead, we analysed a few corporations that would show promise for the 2018 year. We invested in Tesla, Amazon, Twitter and a few UK based stocks at first. Halfway through the trading game the US stock market hit a slump and we bought whatever we could at the lower prices with the anticipation that they would all recover within the next two months…and they did exactly that! The returns we made on investments were better than anticipated. – Brayn van der Merwe (UWC)

The winning UWC team (3^rd overall). From left to right: Hylton Hollander (Lecturer), Nadine Le Roux, Grant Rossiter (FNB Securities), Duminé Tocknell, Sihle Magodla, Brayn Van Der Merwe, Lelethu Bodlani, Zanele Zaza (FNB Securities), Richard Levesque (FNB Securities). Absent: Shinice Jackson.

(Thanks to Hylton Hollander for this post.)