Just over a year ago, the Johannesburg Stock Exchange in South Africa held a highly unusual event with which major electronic trading venues are not often associated.
Under the name JSE Investment Challenge, the event took the form of a virtual trading competition, in order to provide ambitious traders with a virtual platform to test their skills and experience a real trading environment.
Now, a year on, a report by Finextra has detailed the current careers of the three highest placed participants, and how the trading competition affected their trading.
Back in June, Johannesburg Stock Exchange provided a demo account containing 1,000,000 rand (approx $91,000), in order that each participant could create a virtual portfolio of shares which were listed at the venue.
Subsequently, share performance was tracked and measured to determine a winner.
Clearly demonstrating that such an initiative can appeal to retail FX traders in South Africa, third position was taken by Marlin Govender, whose portfolio increased by 13% (130,000 rand), winning him a prize of 10 000 rand: “Winning the third prize was a welcomed relief financially, I was trading forex at that point in time and having a global view helped me choose the right stocks on the JSE. “What surprised me was that anyone can enter the game and win. This made me grow in confidence as I didn’t have to be an expert.”
South Africa’s retail traders are relatively plentiful given the considerably smaller population of the country compared to regions in North America, Asia or Europe, however there is a contingent which enjoys interacting with the trading community and learning from institutions. Indeed, South Africa has a vibrant meetup scene frequented by FX traders, both novice and experienced, as well as a very comprehensive IB network, by far the largest in Africa.
In terms of concentration on FX, JSE recently added a series of FX futures which track the exchange rate between the Rand and select African currencies. The JSE listed three new currency futures contracts which track the exchange rate between the Rand and the Zambian Kwacha, Kenyan Shilling and Nigerian Naira.
Deon van der Merwe, who placed first last year, grew his portfolio by 18 % (180,000 rand) from the virtual R1-million share portfolio and took home R30 000. At the time, Deon was employed on a contract basis and was looking for permanent employment. “Participating in the contest gave me a competitive advantage in job interviews, I believe, because it showcased the interest and passion I have in trading and investment.”
“Our aim is to increase public participation on the JSE by showing that investing is something that anyone can do. The competition fulfils an important role in financial education and gives people a solid foundation for investing” says Dudu Seme, Retail Development Officer at the JSE.
Although registrations for this year’s game are long since closed, investors can make use of the JSE’s virtual trading platform free of charge for a trial period of 30 days.