The Covid-19 pandemic and subsequent national lockdown presented challengers with a chance to delve deeper into the world of investment and further interrogate their understanding of the markets, says Corporate Social Investment (CSI) Officer at the JSE, Ralph Speirs.
“This is why the April winners of our monthly prizes have done so well. In Mid-March, the markets started reacting to the impact of the Covid-19 pandemic with a great deal of volatility and to come out a winner, as amateur investors, shows that you have really been paying attention,” he says.
The challenge, in its 47th year, draws school learners and university students with an interest in investment and stock markets. Over the decades the initiative has come to be highly regarded as an instrument that introduces the country’s youth to investing and the stock exchange.
It takes the form of a simulator where each team of four learners or students from the same school or institution are given an imaginary sum of R1-million. With this the teams trade on the stock market and invest in JSE-listed shares over a six-month period. What they learn has great potential to positively impact the South African economy in the future as participants learn to make sound financial decisions.
The various teams compete with other teams from schools and institutions countrywide. There are plenty of prizes to be won monthly. There are also annual prizes for top performing teams, schools, teachers and mentors. The team that wins the JSE Investment Challenge receives cash deposits into an investment account for each team member and the top performing university team is awarded a trip to an international stock exchange.
Justin Lacob, commerce and investment challenge mentor teacher at The Settlers High School in the Western Cape, says that in the four years he has mentored the challenge at his school, none of his teams have ever won. This month, however, his team of four challengers, also known as CETT (first initials of the members) scooped first place in the equity portfolio category.
Team leader, Ethan Roelf, engaged Speirs during a Facebook Live session for school participants of the challenge on Thursday afternoon.
Says Lacob: “I’m very proud of Ethan and the team. He is one of my economics students and he’s always shown an interest in the markets and he stays motivated. I have a lot of confidence in them. I’ve been the teacher in charge of the challenge since 2016, and this is the first year to have a team win.”
He says that in light of the pandemic they followed a strategy to invest heavily in commodities such as gold, reasoning that these would do well in times of crisis.
“We also invested in Sasol. With the oil prices taking a knock, we knew that they would only recover and get better from there,” he says.
Since the lockdown he says he’s taken great effort to stay in touch with the team leader via Zoom call to discuss strategies. Roelf then moves the conversation to the rest of his team via WhatsApp.
“We also made our first buys before lockdown which also worked in our favour,” he adds.
Lacob says the lockdown has allowed the team more time to learn about investment online and to interrogate movement in the markets, which has provided them with an advantage and deepened understanding.
“We are not a private school, and as with most public schools during this time we haven’t had the capacity to do online classes with our pupils of which a large majority is from middle or working class families. This has meant that there hasn’t been much school work for the pupils during this time, which provides those who are part of this challenge more time to investigate and grow their knowledge in the markets and stocks.”
Speirs says the complexities surrounding this year’s challenge will only fare well for participants.
“We can only hope that the opportunity is taken and that those who need help or assistance do not shy away from raising their hands,” he says.
The challenge is currently underway. For further information visit: http://schools.jse.co.za
INCOME PORTFOLIO: The Comrades from Hoërskool Durbanville in the Western Cape
EQUITY PORTFOLIO: CETT from The Settlers High School in the Western Cape
SPECULATOR PORTFOLIO: Cleaver for President – ACCP Prophets of Profit from Acudeo College Crystal Park in Gauteng
SPECULATOR PORTFOLIO UNIVERSITY: Inkunzi Traders from Unisa in Gauteng
ABOUT THE JSE
The Johannesburg Stock Exchange is based in South Africa where it has operated as a marketplace for the trading of financial products for 130 years. It connects buyers and sellers in equity, derivative and debt markets. The JSE is one of the top 20 exchanges in the world in terms of market capitalisation and is a member of the World Federation of Exchanges (WFE) and holds the chairmanship of the Association of Futures Markets (AFM). The JSE offers a fully electronic, efficient, secure market with world class regulation, trading and clearing systems, settlement assurance and risk management.
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