Want stock advice? Ask students
Baptist University finance students made nearly HK$400,000 last year by investing in the mainland and Hong Kong stock markets.
Andy Chau Man-tai, a third-year finance student and president of the university's investment club, said they achieved a 39.65 per cent return.
The 14 executive members of the club started off with a donation of HK$900,000 last January and boosted the balance of their student union fund to HK$1.29 million by the end of the year. Half the donations came from university alumni and the rest came from anonymous donors.
'We're very lucky that we have several generous donors to strengthen our practical experience in the stock market,' Mr Chau said.
The students did not suffer any significant losses. 'We are not afraid of losing the money. We have a prudent investment strategy,' he said. 'We researched the intrinsic values of each stock and discussed the risks. Each decision was well thought out.'
Mr Chau said the students would meet for three hours every week to present and vote on strategies.
Billy Mak Sui-choi, associate professor of finance and decision sciences, is one of the club's academic advisers.
'They are also backed by around 10 alumni who are working as industry analysts to get the latest updates on market trends,' Dr Mak said.
After a strategy was devised, students would have to obtain written permission from two lecturers before passing the order to the university's accounts department, he said.
To limit risk, students were only allowed to invest in 11 out of 43 selected stocks on the Hang Seng Index.
'All income earned will go straight back to the university. The students have no direct access to the money,' Dr Mak said.
The purpose was not to generate profit but to give students a chance to handle real money while using theories they studied, he said.
'I think they did a pretty good job as last year the market was quite volatile. They are looking ahead to a very challenging year,' Dr Mak said.