Philippine students win global investment research contest
Over 800 universities and 3,700 students took part in the year-long competition
THE University of the Philippines Diliman won an annual worldwide competition in investment research that was hosted in Singapore for the first time last month.
The team emerged tops in the global finals of the CFA Institute Research Challenge, held at Raffles City Convention Centre on April 25, beating the other two finalists from Politecnico di Milano and the University of Missouri, Kansas City.
More than 800 universities and 3,700 students participated in the competition, which began last May.
"The level of talent we have seen throughout this global contest has been remarkable," said John Bowman, managing director and co-lead of education of the CFA Institute.
The CFA Institute is a global organisation of investment professionals. Its investment challenge, introduced in 2006, aims to promote best practices in investment research.
Mentors guide and train the students on company analysis and presentation skills.
In the regional and global finals, students had to present their recommendation on a company to a panel of judges, who are investment professionals.
Students spend the first 10 minutes presenting, and the next 10 minutes answering questions from judges.
This year's global finals judges were Fullerton Fund Management CEO and chief investment officer Manraj Sekhon, Riedel Research Group equity research analyst Adrian Ciocoi, Al Meezan Investment Management CEO Mohammad Shoaib and Equity Pricing Strategies founder and managing director Keith Neruda.
Typical questions asked by the judges were on industry risks, demand and supply dynamics, management competence, foreign-exchange movements, regulatory risks, as well as on the earnings growth assumptions made.
If the recommendation was a "buy" or "sell", students would be quizzed on what they thought the market was missing that caused prices to be where they were.
The five students on the winning team were Geoffrey Archangel Bautista, Diego Mikhail de Ocampo, Nigel Williamson Lee, Corrine Francesca Reyes and Miguel Alfonso Solidum.
The team wins a US$10,000 grant for their university. Each team member also receives a scholarship for the CFA programme.
They presented and defended a "buy" report on Manila Electric Company (Meralco), the Philippines' largest electrical power distributor.
Using discounted cash-flow calculations, the team gave a one-year target price of 397.40 pesos, arguing that the company's highly defensive core business, promising investments in power generation and solid financials warranted a "buy". Meralco, meanwhile, had been trading below 300 pesos for much of the past year.
As a utilities company with regular cash flows - giving it bond-like characteristics - the company was hit in part by fears of interest rates going up as the US Federal Reserve tapers its monetary stimulus.
