City University of Hong Kong (CityU) will train the region's first 'financial engineers' to boost the capabilities of financial establishments in managing risks. The bachelor degree programme, to be offered in September, comes at a time where risk management skills have become of paramount importance in dealing with the fallout of the regional financial crisis and local economic uncertainty. Professor Stephen Cheung Yan-leung, head of CityU's Department of Economics and Finance, said the programme was designed to meet an increasing and urgent demand in the public and private sectors. 'Through an integrated curriculum of three disciplines, these financial engineers must understand financial theory and be able to apply it to sophisticated mathematics using the latest computer technology,' he said. The three-year BBA in Financial Engineering would have an intake of 40 students. The programme features the largest assimilated trading room on a local campus with actual market data. 'This provides students with the experience of the actual financial market and lets them participate and have a feel of what's going on in the market when taking the investment course,' Professor Cheung said. Students at Reuters Information Systems Laboratory have to use a hypothetical position to trade among themselves using market data. Their performance in the exercise would weigh heavily on their course assessment, the professor said. 'Trading in the lab brings out the killer instinct in them. The programme will teach students how to read the financial market and interpret news and make wise decisions accordingly,' he said. There would be a special emphasis on derivatives instruments. Despite the high risk involved in derivatives, there was consensus that they promoted market efficiency, made the market more complete and enabled traders to hedge their positions, Professor Cheung said. Graduates would have all the necessary skills to hedge against risk. They would be valuable for banking, insurance and stock exchange markets as well as multinational corporations which had stakes in foreign currencies, he said. The programme was planned following the success of the masters programme in financial engineering in 1996 when there were 400 applications for 20 places. Participants included two senior officials from the Stock Exchange of Hong Kong and the regional manager of an American bank. The bachelor programme provided a strong technical base to support top management, Professor Cheung said. Language skills in Putonghua and English were also emphasised to ensure competitiveness in the mainland and international markets.