Deciphering the stock symbols

by Sophie Leung

Karl Lung, CFA, president
The Hong Kong Society of Financial Analysts
Photo: Johnny Kwok

Professional certification key to sustained dynamism in financial world

Modern-day investment markets are booming, attracting people from a cross section of society. Amateurism often prevails however when new investors adopt a speculative approach without fully understanding the fundamentals of a balanced investment portfolio. Enter the Hong Kong Society of Financial Analysts (HKSFA) dedicated to raising the bar in the industry.

A key objective of the HKSFA is to elevate the overall standard of financial analysis and investment advice offered to investors. Providing continuous education to its members and the public, the society organises an average of two seminars every month, covering topical issues.

According to the HKSFA president Karl Lung, CFA, the organisation is also active in advocacy issues. It maintains constant and direct dialogue with securities market regulators and responds to consultation papers. One example is on quarterly reporting. From his professional standpoint, Mr Lung believes Hong Kong should adopt quarterly reporting mechanism as soon as possible. "A more frequent reporting system will not only enhance corporate disclosure for the benefit of investors, it will also lower the timeframe opportunity for insiders to take illicit advantage of privileged information," he explains.

Expanding scope

Globally, the HKSFA is the fourth largest member society of the overarching CFA Institute. Currently the HKSFA has more than 5,000 members, among which almost 90 per cent are CFA charterholders. In collaboration with CFA Institute, the HKSFA actively promotes the CFA Programme. It also holds study group sessions for CFA Programme candidates to prepare them for examinations.

Concerning the pass rate for CFA exams, Mr Lung remains pragmatic: "The CFA Programme's course of study is like Shaolin monastery training; it is tough but tremendously rewarding because it affords candidates a solid foundation in basic finance."

The exams reflect the growing complexity and globalisation of investment management practices. Since the first examination in 1963, the average global pass rates are 46 per cent for Level I, 51 per cent for Level II, and 67 per cent for Level III. There are currently about 82,000 CFA charterholders worldwide.

Regarding career prospects, Mr Lung views the most popular business sectors currently for CFA charterholders as institutional investment and private equity. He advises undergraduates looking to take the CFA exams to wait until they have obtained some solid work experience in the field. "Sole reliance on theoretical learning rather than practical experience rarely suffices in the financial field. Both theory and experience are essential to become a shrewd analyst," advises Mr Lung.

China challenge

Many foreign-funded enterprises or joint venture corporations in China prefer hiring CFA charterholders because the certification is immediately recognised and admired globally. However, to date, only about 1,300 CFA charterholders are based in mainland China, leaving seemingly ample opportunities for Hong Kong-based CFA charterholders to enter the market. Hong Kong-based CFA charterholders may have the advantage of experience with international systems and an understanding of diversified financial societies, but mainland Chinese nationals may find themselves in an advantageous position in teams of local network and understanding of the China market.

As a willingness to embrace life-long learning is now becoming a professional prerequisite, the HKSFA has been offering educational seminars to its members, and has extended the offering to members in Shanghai and Beijing since 2006.

Members are given priority to attend these popular educational events at a discounted rate. Regarding professional opportunities, members can also browse the exclusive JobLine area on the society's website where vacancies for high-calibre candidates are regularly posted by established financial firms.

Although the CFA charter is not a requirement to join the society, applicants should have at least four years' work experience related to investment decision-making processes and pass an ethics examination approved by CFA Institute. Alternatively, CFA Institute current members in good standing are also welcome with the backing of one regular member and their supervisor to sponsor the application.


Taken from Career Times 23 May 2008, p. A4
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