Kathmandu College of Management (KCM), on June 7, 2020, successfully wrapped off the final KuberWiz session for the year 2019/20. KuberWiz program is a flagship stock investment program where students learn how real-life stock investments are done by investing a small amount of their own money combined with an equal part of loan from college in the only capital market of the country, Nepalese Stock Exchange (NEPSE). It provides an opportunity for the IIIrd-year Finance & Banking students of the KCM-Siam International BBA program to put their theoretical knowledge into practice where concepts like stock research, business analysis, financial modeling & different approaches of valuations are utilized making them better investors. Additionally, they also receive timely guidance through many industry experts along with KCM finance and banking faculty as their mentors along their eight months’ KuberWiz journey.
Unlike other years, this year’s participants saw a roller-coaster ride as Nepse index rallied to surpass 1600 points in late February while it was just hovering around 1100 points in early December of 2019. The current COVID-19 situation only added to their panic as NEPSE had been closed indefinitely following the nation-wide lockdown since late March. Nevertheless, students drove through these challenges with perseverance. They are still holding on to a large chunk of their portfolio and are hopeful that the market will bounce back once the lockdown is over and the economy is back and running.
The virtual session was accompanied by the guest judges, Mr. Ajay Shrestha and Mr. Niranjan Phuyal.
Mr. Shrestha is the Chairman and Managing Director at iCapital and managing director at Alpha Capital. He has 12 years of experience in national and international financial markets and his core expertise lies in the stock market and venture development. He is a serial entrepreneur and has founded SB Textiles, Growmax Investment, Source Code, Kaffeine, and Nepali Paisa. He also serves as a Chairman at Attic Group and is also the Immediate Past President at Nepalese Young Entrepreneurs Forum (NYEF).
Mr. Phuyal is the Deputy Manager of NEPSE and is also a member of the board of directors of CDC and clearing limited. Mr. Phuyal has over 13 years of experience ranging from management education to life insurance to the stock market. Mr. Niranjan is also a visiting faculty at Ace Institute of Management & Kathmandu University School of Management (KUSOM).
Among the seven groups competing in the program, Group 7 won the competition. Their portfolio was highly diversified with their asset-allocation being in commercial banks (50.1%), micro-finance (8%), life insurance (2.9%), manufacturing (26.8%), hotels (3.7%) and fixed deposits (8.5%). They had expected a 25% return on their overall portfolio with their investment strategy to choose stocks based on fundamental analysis and trade based on technical analysis. They used the dividend discount model (DDM) to find the intrinsic value of nine companies to check whether the stocks were overvalued or undervalued. Overall, their total gain was Rs. 43,081 and during their conclusion they stated that KuberWiz taught them valuable lessons of controlling emotions, being rational, and having patience during the process of investment.
Group 4, securing the second position, had a high-risk profile, and had a return objective to earn 20% on their investments. Their strategy for asset allocation was to incline more towards equity investments and chose finance (8%), hydropower (9%), non-life insurance (19%), and development banks (43%) for their allocation. Their investment objective was to engage in value investing and to focus more on capital gain than dividends. The seven companies they invested in gave them realized gain of Rs 12792.1 and unrealized loss of Rs -7494.
Group 1, securing the third position, had an expected return of 15% on their investments and they allocated their assets in commercial banks, life insurance, non-life insurance, and telecommunication sectors. To Group 1, diversification was an important factor and they had invested in eight companies that gave them net realized gain of Rs. 5067.76 with their return on investment (ROI) being 2.41%
The guest judges also shared their insightful observations and some learnings from their professional lives. Mr. Shrestha mainly stressed the fact that mistakes while investing are bound to happen, and the market, if it goes down, will come back up eventually but what matters the most is the lessons learned from the mistakes and applying the learnings to future investments. Although this advice is simple, most people don’t actually follow this and in turn, lose a lot of money in the market. He also talked about some of his personal experiences he has learned over the years as an investor and highlighted the importance of business analysis while picking stocks through a fundamental approach. He also stressed the value of reading annual reports.
Likewise, Mr. Phuyal pointed out the importance of following one’s return objectives and sacrificing greed in the investment process. He suggested the students make and follow their pre-set investment objective and focus not only on technical and fundamental analysis but also on a relatively newer approach known as behavioral analysis. He also advised the students to make use of technology and buy & sell stocks online instead of following the traditional way of calling their brokers. Lastly, he encouraged students to become an entrepreneur and start their own ventures with the returns from their investments and help build Nepal’s economy.
The session concluded with the announcement of winners and vote of thanks addressed by the vice-principal of KCM, Mrs. Maria Shrestha. Group 1 bagged the third place and were awarded books on business & personality development. Group 4 became the runner-up with a cash prize of Rs. 20,000 while Group 7 stood out in first place and won the title of “KuberWizards” with a cash prize of Rs. 30,000.