JSE Investment Challenge 2021: Pupils and students take on ghost trading programme lock, stock, and barrel

First published in the Daily Maverick 168 weekly newspaper.

The challenge is a youth corporate social investment (CSI) programme that aims to teach South African learners and students about investing on the JSE and the larger role this investment plays in SA’s economy. Participants get to test their share-trading skills through a simulated “ghost trading” programme. Each team of four members has been given a virtual sum of R1-million to invest in JSE-listed shares. Their performance is tracked against the other teams.

In line with Covid-19 protocols, this year’s challenge is online. Ralph Speirs, CSI officer at the JSE, says the programme first went virtual last year because of the pandemic restrictions. “Armed with the learnings and insights acquired from last year’s edition, we are ready to push the envelope and take things to a new level,” he says.

Participation rates are high, with 421 schools and 95 universities and colleges participating in 2019. School participants must be in Grade 8 and upwards.

How it works

The competition, which is open to both school and university teams, features three categories: income (low risk), equity (moderate risk) and speculator (high risk). Each team decides at the outset which category they want to compete in. The income portfolio has to maintain a cash component of R400,000, can trade any amount and can only invest in the JSE Top 40. The equity portfolio has to maintain a minimum cash component of R250,000, can trade up to 10% in a company and can invest in about 140 shares across the JSE All Share Index. Teams that choose the speculator category do not have to maintain any cash component, can trade up to 10% in a company and can invest in all 330 shares listed on the JSE, as well as warrants.

The aim in the equity and speculator categories is to achieve the highest growth on your portfolio, whereas the aim in the income category is to achieve the highest income while beating inflation. The inflation rate for the purpose of the challenge is set at 6% a year or 0.5% a month.

Trades placed before the market closes at 5pm are completed at the closing price on the day. Trades placed after 5pm are completed at the closing price on the following trading day.

Like any JSE investor, teams have to pay brokerage fees. Those on a buy-and-sell are at 1% of the value of the securities traded, with a minimum brokerage charge of R75 per trade. Securities transfer tax of 0.25% is levied on all purchases.

To reward top performers and pique the interest of all participants, there are monthly and annual prizes. When the competition finishes at the end of September, members of the overall winning high school team will each receive a cash prize, deposited into a Satrix investment account, and the top-performing university team will win a trip to an international stock exchange.

To qualify for the annual prize, teams must execute at least one trade in each month of the six-month challenge and must complete a minimum of 10 transactions overall.

March monthly winners

The winners announced for the month of March were:

Accounting Queens from Gansbaai Academia for the income category, with income of R5,688.79.

MP Magic Traders from Mpumelelo Secondary School in the equity category, with portfolio growth of 3.11%.

Pure Wholesomeness from Paul Roos Gimnasium in the speculator category, with portfolio growth of 9.75%.

Spartan Capital from the University of Stellenbosch in the speculator university category, with portfolio growth of 8.71%.

Last year’s winners

Last year, Mpumulelo Secondary School in Mpumalanga scooped five awards in the income portfolio category. Teacher Sizwe Mtsweni said the 15 learners in the competition had put in hard work and commitment. “What is more important is the knowledge the learners gained in this exercise,” he said.

The school is off to a great start already this year, with a win in the equity category. Hopes are they can keep the crown their school teams won last year.

“We provide assistance throughout the competition to ensure that schools that are under-resourced don’t fall by the wayside,” Speirs says. Next month’s winners will be announced on 17 May. DM168



Business Maverick is supporting the JSE Investment Challenge 2021.

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for free to Pick n Pay Smart Shoppers at these Pick n Pay stores.