Young guns get their due honours

Exotix’s Jumai Mohammed is the winner of the Young Analyst award in the equities category. Peregrine’s Emily Flint takes the award in the nonequities section.

The awards were introduced to the Mail’s analyst rankings last year to recognise young talent in the industry. Entrants, who had to be under 30 years old as at December 31 2015, submitted reports provided to asset management clients, motivating for investment ideas.

Each entry was judged according to scorecards developed for the process, with originality and independence of thought high on the priority list. Each report was assessed by six judges, which resulted in a wide array of marks.

Nigel Suliaman, convenor of the judging panel and a member of the CFA Society SA, says the quality of the submissions matched that of the industry.

“I read lots of broker reports just about every day and these are pretty much at the same standard as those I normally see. I wouldn’t have known they were written by junior analysts,” says Suliaman.

Interestingly, however, one of the judges is an academic, and Suliaman says he was more critical than his fellow judges, who were working professionals.

“I think academics look at things differently. For me, being concise and getting to the point is important, while academics want to see basic concepts explained and expanded upon. I think the professionals assume a certain level of knowledge — though we all frown on jargon.”

However, the academic judge concurred with his peers in giving Mohammed’s report on the Nigerian cement industry the highest ranking in the equities category. Suliaman says that with all the judges being South African, he might have expected them to go for something they were familiar with. “But Financial they went for the Nigerian cement report, and that makes it stand out more,” he says.

“It provided an excellent overview of the industry with a good analysis of the individual companies. It described each company from an operational as well as financial perspective, and included a sensitivity analysis of the companies, which we liked.”

The second-ranked equities report, PPC: Egg of the Phoenix by Avior’s Gareth Visser, also contained well-described valuations and judges liked the regional breakdown of the business.

Suliaman’s main criticism about reports in the nonequities category was that none gave investment recommendations or conclusions but were information pieces — more like economic reports.

Flint’s winning report, In Search of the Perfect Hedge, also stopped short of making real recommendations. “But the description of the case study was clear and well-articulated.”

EM Debt Bonanza by Nedbank’s Mehul Daya assessed debt at a sovereign level.

Suliaman says the analysis was interesting, though valuations were implied