Finance

MASTER IN FINANCE AND INVESTMENT 2010

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It is not fair to ask of others what you are unwilling to do yourself. Anna Eleanor Roosevelt

IMPORTANCE OF FINANCE SPECIALIZATION

Finance is the lynchpin of taught-skills necessary for both navigating enterprises successfully, and ensuring stable economic activity nationally and globally. It is composed of several important facets and thus requires its practitioners to acquire a dedicated, focused and comprehensive set of training, to be appropriately qualified. The Master of Management in Finance & Investment Management (Master in Finance & Investment) at Wits Business School (WBS) is designed to fill this training need.

In fact, a specialization in graduate Finance is a hallmark of most renowned Business Schools globally. The reasons for this phenomenon are: (1) Finance is an indispensable unifying knowledge-area for success in both enterprise and the macro-economy. (2) Finance experts require a program-based training to garner the necessary breadth and depth of knowledge for its effective understanding and application.

Importantly, the WBS’ Master in Finance & Investment program design is motivated by the special need for Finance in the Emerging market context. Gone are the days when Finance was most relevant in the developed market context, due to the fact that financial innovations emanated from this environment, with international finance transactions being essentially an “intra-developed markets” affair. With globalization, emerging markets have become inexorably connected to the dynamism of financial markets and their breathtaking paced innovations. The contagion of the Sub-prime mortgage market (developed markets) originated global financial crisis makes the case for why emerging markets must acquire the requisite capacity needed to understand the workings of financial markets, how to leverage their opportunities, and how to anticipate and mitigate their systemic threats.

The Master in Finance & Investment stands on three necessary pillars of Finance – quantitative/macro-environment foundation knowledge, firm grasp of the workings of financial markets and their evolutionary nature, and solid understanding of corporate finance and governance. The program is for high intelligence and motivated individuals with relevant undergraduate degrees (in e.g., business, economics, engineering, mathematics, statistics and law) who seek to pursue careers in specific areas of finance either as practitioners or researchers. The Master in Finance & Investment requires a set of core courses, track-oriented courses, and a program thesis; with a 12-month, full-time completion period. Being a block-release based program, the duration is designed to equally accommodate students who are working and needing to tool-up quickly for career advancement in the finance field. The teaching staff is populated by top-rate Finance academics from both WBS and partnering reputed international graduate programs, and practitioners with rich finance industry experience.

Kalu Ojah, Ph.D.Professor of FinanceDirector: Master in Finance & Investment

Finance is the lynchpin of taught-skills necessary for both navigating enterprises successfully, and ensuring stable economic activity nationally and globally.

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Until all of us have made it, none of us have made it. Rosemary Brown

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These faculty members are research active and publish emerging market and globally relevant finance articles in reputed international journals as exemplified by the following samples: Ncube, M and Satchell, S (2002), “The statistical properties of Black-Scholes option pricing”, Mathematical Finance, 7:3; Ncube, M (1996), “Modelling implied volatility with OLS and panel data models”, Journal of Banking & Finance, 20:1; Asea, P and Ncube, M (1998), “Heterogeneous information arrival and option pricing” Journal of Econometrics, 83; Gietzmann, M, Ncube, M and Selby, M (1997), “Auditor performance, implicit guarantees, and the volatility of legal liability”, Journal of International Auditing, 1:1; Bhimani, A and Ncube, M (2006), “Virtual integration cost and the limits of supply chain scalability”, Journal of Accounting & Public Policy, 25:4; “The South African Dictionary of Finance” ed. Ncube, M (2009); Mokoaleli-Mokoteli, T, Taffler, R, and Agarwal, V, (2009), “Behavioral bias and conflicts of interest in analyst stock recommendations”, Journal of Business Finance & Accounting, 36:3; Ojah, K and Karemera, D (1999), “Random walks and market efficiency tests of Latin American emerging equity markets: A revisit”, The Financial Review, 34:2; Ojah, K and Manrique, J (2005) “Determinants of corporate debt structure in a privately dominated debt market: A study of the Spanish capital market”, Applied Financial Economics, 15:7; Ojah, K and Monplaisir, L (2003), “Investors’ valuation of global product design and development”, Journal of International Business Studies, 34:5; Ojah, K (2007), “Cost, valuation and long-term operating effects of global strategic alliances”, Review of Financial Economics, 16:1; Gwatidzo, T and Ojah, K (2009), “Corporate capital structure determinants: Evidence from five African countries”, African Finance Journal, 11:1; Ojah, K, Gwatidzo, T and Kaniki, S (2009), “Legal environment, finance channels and investment: Evidence from the East African Community” Journal of Development Studies, forthcoming.

ONE OF AFRICA’S PREMIER BUSINESS SCHOOLS

The WBS brand is unquestionably one of the most recognized and sought after in South Africa and Africa as a whole. It exemplifies its mission statement of “sculpting global leaders”. It has been ranked for a number of years by the Professional Management Review as the leading Business School in Africa, its MBA program has been ranked #1 for the sixth consecutive year by the South African Financial Mail, the London Financial Times has ranked its Executive Programs among the top sixty in the world. WBS is accredited by the Council on Higher Education, the Association of MBAs and the US-based Graduate Management Admissions Council Program.

WBS’ global reach and reputation is demonstrated by the several students exchange programs and collaborative partnerships it has with reputed international graduate business programs such as Duke University’s Fuqua School of Business, London Business School, UCLA’s Anderson School of Management, Wharton School, to name a few. It is one of the very select Business Schools in Africa that belong to the Partnership in International Management (PIM), which is populated by the major graduate business programs of the world – e.g. Wharton School, Kelly School, Babson College, University of Michigan, University of Thunderbird, University of Western Ontario, York University, Tel Aviv University, Kuwait University, Pontificia Universidad Catolica de Chile, Chinese University of Hong-Kong, Keio University, Yonsei University and Thammasat University.

TOP-RATE AND RELEVANT QUALITY FACULTY

Consistent with Master in Finance & Investment’s mission of quality, contemporary and relevant Finance education, its faculty members hold graduate degrees (particularly Ph.D.s) from top international Business and Economics programs such as Cambridge (UK), Cranfield (UK), London and Queens (UK), Saint Louis (USA), New School (USA), Witwatersrand (South Africa), etc.

The Master in Finance & Investment’s mission is quality, contemporary and relevant Finance education.

Management works in the system; leadership works on the system. Stephen R. Covey

backgrounds in numeracy would need some basic mathematical training or brushing-up. A meaningful work experience in the sphere of finance and/or management would be a plus, but not a requirement.

The program is expected to be completed within a maximum of twelve months, including the completion of a program thesis. The program’s time-tabling is based on a block-release formula.

The program is comprised of three parts: core courses, elective courses and a program thesis; with a total of eight units of courses and the program thesis. The multiplicity of electives grouped under three streams of Finance is designed to permit students to decide upfront (from the ‘get-go’) the areas of Finance they seek to slant their expertise towards. Further, the numerous electives enhance the seamlessness of our students’ ability to take courses from our collaborative partners. The program is organized as comprising the three following components:

A. CORE COURSES (4):

1. Corporate Finance & Financial Statement Analysis2. Investments3. Finance Macro-environment Analysis (comprised of special

topics in global, macro- economic and political environments)4. Applied Financial Econometrics (a mélange of multivariate analysis & time-series specific to financial markets)To be completed in the 1st quarter (January-March)

B. ELECTIVE COURSES (4):

1. Four from the pool of available electives (with 1-2 areas of specialization in view), to be completed within the 2nd quarter (April-June) and 4th quarter (October-December)

C. PROGRAM THESIS:

1. This thesis portion commences by the beginning of the 2nd quarter of the program (April) and completed by December. The list of possible elective courses on offer at both WBS and partnering international graduate institutions is presented below, and arranged under three streams of specialization.

CORPORATE FINANCE STREAM

• Advanced Corporate Finance & Corporate Governance• Project Finance & Capital Budgeting Analysis• Advanced Financial Statement Analysis & Disclosures

BANKING AND CAPITAL MARKETS STREAM

• Banking Operations & Financial Institutions Management• Investment Banking & Primary Markets• Development & Entrepreneurial Finance• International Finance and Globalization• Emerging Markets & Financial Market Development

INVESTMENTS AND FINANCIAL ENGINEERING STREAM

• Trading and Securities Selection• Asset Management & Portfolio Formation • Derivatives, Debt and Structured Contracts• Real-estate Markets & Mortgage Finance• Models, Forecasting and Risk Management

STRUCTURE AND DETAILS OF THE MASTER IN FINANCE & INVESTMENT

Taking into consideration (a) core course requirement for solid finance expertise, (b) special finance expertise needs of the emerging market and global environments, and (c) a relatively seamless students exchange or collaboration with current and potential partnering institutions, the Master in Finance & Investment at WBS, is structured as follows.

It is designed for individuals with relevant undergraduate degrees (in e.g. business, economics, engineering, mathematics, statistics and law) who intend to pursue careers in specific areas of finance either as practitioners or researchers. Individuals with limited

The WBS brand is unquestionably one of the most recognized and sought after in South Africa and Africa as a whole. It exemplifies its mission statement of “sculpting global leaders”.

DESCRIPTION OF CORE COURSES

• Corporate Finance & Financial Statement Analysis:

This core course places finance within the context of the goal of the firm, and as such dwells on measuring the firm’s activities and performance in light of the firm’s strategy and goal. Topics such as financial statement and analysis, accounting and economic profits, tax and retirement funds accounting, capital structure, agency issues, dividend policy, firm valuation and valuation methods, are covered.

• Investments:

It introduces the economics of how individuals and firms manage and grow their wealth (unconsumed earnings). Financial markets/institutions are discussed alongside their corresponding investable securities, with emphases on the valuation of debt securities, equity securities, and basic derivative securities. Overviews of background topics such as capital asset pricing models, market efficiencies (anomalies), and portfolio theory, are presented.

• Finance Macro-environment Analysis:

This core course acknowledges that the existence and nature of financial markets, firm’s financing and investing strategies are influenced by the macroeconomic environment – whether due to government policy or international trend/shocks. It dwells on interest rate determination, inflation management policy; tax/spending policy, exchange rate policy, and their linkages to financial markets; and highlights stylized facts on the relationship between business cycles and financial markets. • Applied Financial Econometrics:

This course highlights the quantitative tools’ applications that are commonplace in almost all finance areas. It introduces basic data describing statistical techniques, modern regression techniques, and various aspects of time-series econometrics that make sense of several financial data of varying frequencies. A major emphasis is placed on practical exercises with computer packages of Excel, E-Views and/or Matlab.

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Wits continues to produce graduates who can play their part in our expanding economy.

DESCRIPTION OF ELECTIVE COURSES

Corporate Finance Stream

• Advanced Corporate Finance & Corporate Governance: This course deepens some of the topics introduced in the core corporate finance course, such as agency theory and the market for corporate control, models of corporate governance and how firms can optimize the cost of capital (operation) within a given model. Special topics on capital and debt structures of firms, ownership structure reorganization and financial distress management (M&A, JV, Buy-out, etc).

• Capital Budgeting & Project Finance:

This course looks at how businesses and/or government units practically increase their value by effectively evaluating and

selecting attractive long-term projects. It involves forecasting of cash flows and industry/macroeconomic environments,

determination of risk profiles and corresponding cost of capital. These budgeting tools, alongside risk-sharing arrangements, are then used to understand how firms and

government finance manage large scale, long-live projects that would ordinarily be difficult for one entity to handle

exclusively. Case studies are generously employed. • Advanced Financial Statement Analysis & Disclosures:

Basic knowledge on how firms measure and report their activities and performance is expanded in ways that equips a financial economist to extract the most from financial

reports and disclosures. Consequently, special topics in financial accounting, managerial accounting and information

economics are presented – earnings management, consolidation and special items accounting, harmonization of accounting standards, asset impairment, legislation on disclosures, etc.

Banking and Capital Markets Stream

• Banking Operations & Financial Institutions Management: This course introduces more comprehensively the plethora

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The quality of a leader is reflected in the standards they set for themselves. Ray Kroc

of financial institutions and markets that exist within most national confines, with a significant emphasis on the

economics of financial intermediation and the dominance of thrift institutions in the performance of that function. More than one-half of the course is devoted to understanding core activities of commercial banks – including asset-liability management, capital adequacy and liquidity management,

regulation, consolidation and reform, banking systems, capital arbitrage behavior and credit risk management.

• Investment Banking & Primary Markets:

This is a course on the economics of how publicly traded firms and government units raise external funds for their activity. The forums by which these economic units access

external funds – organized, private or over-the-counter markets – are introduced. Standard securities pricing and issuing procedures are presented, with significant readings

and discussions on topics such as IPO, SEO, certification, conflict of interest, auctions and cornering of markets, and regulation of investment banking and intermediation.

• Development & Entrepreneurial Finance:

This course is largely eclectic and explorative, bringing together various areas of finance and development economics

in search of optimal ways of providing funding to entrepreneurs, particularly small and medium enterprises that generally have limited or no access to traditional funding

sources. Emphasis is placed on special issues of venture capital and private equity, and the nexus between non-government credit institutions, government credit schemes and banks.

• International Finance and Globalization:

This course puts financial management analysis of firms in its international context. The following major topics are covered via lectures and case presentations: international monetary systems and global capital markets, currency value determination and exchange risk management,

multinationality, wealth effects of cross border M&A

and strategic alliances, globalization and risk diversification potentials.

• Emerging Markets & Financial Market Development:

The structural and institutional differences between emerging and highly developed economies are shown to throw up significantly different financial markets between these two national market types. Opportunities and/or obstacles of operating in emerging markets are illustrated in topics such as financial market liberalization and market development, sovereign debt management, contagion, cross-border investment flows and diversification, and emerging market asset valuations.

Investments and Financial Engineering Stream

• Trading and Securities Selection:

This course dwells on two main planks of the investments sub-area: securities selection (with emphasis on equity, bond and currency), and the mechanics and procedures for securities trading and settlement. Valuation techniques, markets microstructures, and trading models are further emphasized. A great deal of guest-lectureship is used here so as to enhance gaining knowledge of real-time trading practices.

• Asset Management & Portfolio Formation:

It provides a broad coverage of popular investment funds – equity funds, fixed income funds, mutual funds, pension/retirement funds, and hedge funds – with emphasis on motivation, institutional underpinnings and management of each of these funds. A significant portion of the course dwells on a hands-on portfolio formation and optimization exercises that draws from various computational models.

• Derivatives, Debt and Structured Contracts:

This course focuses on breaking down the conceptual and theoretical underpinnings of contingency claims/contracts and their valuation models. Key topics here are options, futures, swaps; and how they are used as investment assets

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With globalization, emerging markets have become inexorably connected to the dynamism of financial markets and their breath-taking paced innovations.

A big man is one whomakes us feel bigger when we are with him. John C. Maxwell

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as well as portfolio hedge instruments. Special attention is also given to models of fixed income and structured contracts, with a highlight of their linkage to derivatives.

• Real-estate Markets & Mortgage Finance

This course surveys the real-estate markets locally and internationally, and highlights these markets increasing influence on financial markets and the macro-economy. It focuses on institutions that have been set up to address the special features of these huge mortgage (housing credit) markets, the mortgage loan based derivatives (securitization, pass-throughs, spvs, etc) and modeling and valuing of these often complex credit contracts.

• Models, Forecasting and Risk Management:

This eclectic course combines topics from statistics, calculus and modeling, to provide more in-depth skills for computational financial analyses. It covers time-series analysis including autocorrelation, causality, co-integration, and volatility forecasting. These time-series techniques are combined with stochastic calculus to engineer contracts which permits hedging of various kinds of financial risks.

FEES

Detailed information will be found in the Fees Booklet, which is given to students when they register.

The cost of the MM is R 80 588.00

HOW TO APPLY AND OTHER RELEVANT INFORMATION

Application Process1. MM Application form from faculty office2. Brief synopsis or profile of your qualifications, work background and why you wish to do the qualification.

3. Transcript letter of your last qualification

Submission deadline for applications: 23 November 2009

Details of this road-map/application proccess, and the contact details of the programme manager are:

Rajeshree Naidoo (Raj)Programme ManagerTel no: +27 (0)11 717 3142Fax no: +27 (0)11 717 3514Email: rajeshree.naidoo@wits.ac.za

Emerging markets must acquire therequisite capacity needed to understand the workings of financial markets.

The secret of a leader lies in the tests he has faced over the whole course of his life and the habit of action he develops in meeting those tests. Gail Sheehy

Wits Business School, University of the Witwatersrand, 2 St. David’s Place, Parktown, Johannesburg, South Africa,

Call Centre: 0861 000 (WBS) 927Website: www.wbs.ac.za

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