Africa Career Guidance - Stock Exchange

Stock Exchange: Investment Analyst

The work

An investment analyst basically examines the performance of companies, market sectors and the economy. This information is then presented to clients, giving them details about when to buy and sell their investments. The research must be accurate, even the smallest error can wipe thousands off an investment portfolio.
Investment analysts need a strong financial background. They also need a detailed understanding about how the economy functions and the impact that certain events will have on the value of a company. Investment analysts tend to specialise in one sector - for example telecommunications, financial services, energy, retail or pharmaceuticals. They need to be aware of all the activities affecting the sector,
including:

changes in market prices
changes to the value of currencies
company takeovers
Bank announcements.

Using spreadsheets and financial modelling tools, they try to forecast how prices in shares and bonds will move and pass this information onto clients. Most of the work is now done on computers.
Clients are usually fund managers responsible for investing employee pension funds. They want to know the best shares and bonds to invest in. Investment analysts have to provide evidence which supports the investment activities of large organisations, banks and international companies.
There are two main types of investment analyst - those who work on the 'sell side' and those who work on the 'buy side'.

On the 'sell side', investment analysts usually work for stockbrokers. The stockbroker uses investment analysts reports to give their clients advice on what to buy and sell and to attract new clients.
On the 'buy side', investment analysts work for investment management companies, pension funds and insurance companies, helping them decide on how to generate the best return for their investments.

No two days are the same for analysts. They might work on several projects simultaneously and must always be prepared to respond immediately to a sudden announcement or event. They normally work in small groups, reporting to an investment portfolio manager who manages the client relationships.

Hours and Environment

Investment analysts work long, irregular hours. It is not unusual to work a 14-hour day.
Most analysts are at their desks before 8am, checking the overnight news and reading financial newspapers. The Stock Exchange opens at 8am, and there is a 'News Service' starting at 7am. The hours don't follow a set pattern and analysts might not finish work before 7.30pm, perhaps later during busy periods. They may have to work at weekends.

Skills and Interests

Investment analysts should be:

self confident
good communicators
able to think on their feet and respond quickly to economic changes
methodical
comfortable with numbers and able to interpret figures
well-informed and interested in the economic climate and global politics
able to work under pressure
team players
comfortable with computers, spreadsheets and financial modelling.

Entry

While there is no upper age limit for entry to this profession, most analysts are under 40. Although most analysts enter as graduates, previous experience in certain industry sectors, such as telecommunications or life sciences, is attractive to employers. It also helps if applicants can demonstrate a solid understanding of how the European and global economy works.

Training

It is becoming increasingly difficult to enter the profession without a degree or relevant qualification. Most further education colleges offer Access courses for mature students who want to study for a degree but do not have the normal entry qualifications. Alternatively, adults could try and get some work experience with an investment house, build up a network of contacts and register to take the Chartered Financial Analyst (CFA) exams.
Many leading investment firms recruit trainees straight from university and an expected first or 2.1 degree. Generally, companies hiring will accept any degree subject, however mathematics, politics or economics are advantageous. Foreign languages are useful for those who want to work abroad. Employers expect applicants to take an interest in current affairs and their effects on the market. Some companies like applicants who can track an imaginary portfolio. Some firms ask for a professional qualification such as accountancy.
Entry requirements for degree courses are at least: five Olevels grades (A-C/1-3), with two A levels grades.
To gain a competitive edge over other applicants, intending analysts can try and secure work experience during the summer months with larger companies.
At the interviews, applicants are likely to have to take aptitude tests and make a presentation to a panel.

Qualifications and entry requirements can change from those given so check carefully when making applications for college courses or jobs.

Opportunities

The growing focus on investments means there are opportunities for qualified and experienced investment analysts. London and New York are the leading investment centre in the world and most jobs are based there. However, there are jobs in other African cities, including Nairobi, Accra, Lagos, Johansburg and Cairo.
With a greater focus on the global markets, there are opportunities to work in financial centres across the world, particularly in Europe, Asia and America, especially if the employer has offices there.

An investment analyst might work for:

a global investment management company
a specialist firm concentrating on one market or product
a large banking institution.

Large employers include Watson Wyatt, Merrill Lynch, Mercer Investment Consulting, Hewitt Bacon & Woodrow, KPMG,Hymans Robertson, Standard Chartered Bank, Barclays Bank, Stanbic Bank, Rand Bank to name a few.
Fund managers in larger companies are also starting to employ in-house analysts to identify opportunities.

Annual Income

Further information

Securities & Investment Institute (SII)
http://www.sii.org.uk

Financial Services Authority (FSA)
www.fsa.gov.uk