Johannesburg, 31 August 2021- First-year accounting students at the University of Johannesburg (UJ) attribute their success in clinching the July monthly prize in the JSE Investment Challenge to their ability to see opportunities in a time of crisis.
Speaking for team VK Phenomenals, Lulamo Mathebula says the national lockdown resulted in the loss of value of some JSE-listed companies. “These share-price declines, however, from our analysis, did not reflect a fundamental crisis in the business model or how these businesses were run,” says Mathebula.
The winning team viewed the share-price decline as temporary. The decline was primarily from bigger environmental factors that were not linked to the way these businesses were run or the validity of the business models or offerings. “Our approach as a team was to identify those companies that were impacted most severely by environmental factors, which in turn could potentially represent the best opportunities given the expected re-bound when the economy begins to open up as the government relaxes the lockdown regulations,” explains Mathebula. “In essence, we were looking for undervalued assets whose prospects looked bright, and as it turned out, we found a few of those."
Mathebula believes the genesis of their investment strategy is strongly linked to a business module offered to UJ students aspiring to become Chartered Accountants (CAs). He highlights that this business module places a great deal of emphasis on making students appreciate the link between real world events and business performance. During the period under review, VK Phenomenals registered a 15.31 percent growth of their portfolio, beating all their peers in the university category of the monthly competition.
Ralph Speirs, CSI Officer at the JSE, says he is highly impressed with the maturity and soundness of team VK Phenomenals investment strategy.
“Not only did they surpass their peers in terms of their portfolio growth, but I have no doubt that their performance compares quite favourably with that shown by some seasoned investment managers who have been in the market for several years,” says Speirs.
The primary aim of the JSE Investment Challenge is to broaden financial literacy and awareness about investment options. The Investment Challenge is the JSE’s flagship project for consumer education and part of its corporate social investment (CSI) initiatives which has been successfully running for 48 years.
The competition enables learners and students to become aware of the fundamentals of an investment strategy. Through the Investment Challenge, participants get the opportunity to learn about investing on the JSE and then test their skills against each other via a virtual trading account of R1 million. Participants are rewarded with monthly prizes awarded to the winning schools and team members, as well as their respective teachers.
July 2021 category winners were:
- Income portfolio- Relax and Trade MP, Mpumelelo Secondary School
- Equity portfolio-Futura Francolins, De Rust Futura Academy
- Speculator portfolio- Fire Fox, Pretoria Chinese School
- Speculator portfolio (university)- VK Phenomenals, University of Johannesburg
To learn more about the challenge, visit the JSE Investment Challenge website and to stay updated, follow the competition’s social media accounts on Facebook, Twitter and Instagram.
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