Competition on Research Challenge – CFA society

The CFA society organized a global competition under the name of Research Challenge, It offers students the unique opportunity to learn from leading industry experts and compete with peers from the world’s top finance programs. This annual educational initiative promotes best practices in equity research among the next generation of analysts through hands-on mentoring and intensive training in company analysis and presentation skills.

The Challenge gathers students, investment industry professionals, publicly traded companies, and corporate sponsors together locally, regionally, and globally for real-world competition. Local-level competitions are organized and judged by CFA Society members and volunteers who function as local hosts. The winning university team from each local competition advances to one of the three regional competitions. The regional and global competitions are hosted by CFA Institute in the Americas; the Asia Pacific; and the Europe, Middle East, and Africa regions. The winning teams from each regional competition advance to the Global Final, where one team emerges as the global champion. Department of Financial Management, University of Jaffna currently sends two teams for the competition where each group has been formed with 5 members, and Mrs. Mithila Gowthaman, Lecturer (Probationary), Department of Financial Management, University of Jaffna has been nominated as Faculty Mentor. Further, for next year’s competition our university has already nominated a shadow team who participates in the training sessions at the moment. The training program assists students to carry out rigorous equity research for a publicly traded company. The training program mainly focuses on ensuring the students understand the steps to carry out investment-related research which includes Industry analysis,  Financial Research, Revenue and cost driver analysis, Relative Valuation and Discounted Cash Flow analysis, and Investment note analysis. As an output, each team has to build a detailed financial model for a given company where they need to enter historical data for 5 years including quarters (Income statement, Balance sheet, and Cash Flow statement). Later on, students need to analyze the revenue and cost drivers of the company and should forecast for the next three years based on a quarterly basis.  The next step would be, for students will carry out a valuation and arrive at a target share price based on both DCF and RV analysis for the pre-mentioned publicly traded company. This requires them to work on more than 10 worksheets in excel. The Final step would be based on financial model analysis, each team needs to write an investment note by giving the recommendation to buy or sell for that particular company’s share in Colombo Stock Exchange which takes around 30 pages in a word document. Afterward, teams will present their analysis to the panel if they are short-listed based on the quality of the report. The Department of Financial Management is proud to be part of this program as it will enhance the knowledge of the students on the practical application of each theory they learned under equity valuation and will give recognition to the Department.