The ESG Trading Initiative 2022 – Middle East

A Global Leader in Management Education

The Rotman School of Management is part of the University of Toronto, a global centre of research and teaching excellence at the heart of Canada’s commercial capital. Rotman is a catalyst for transformative learning, insights and public engagement, bringing together diverse views and initiatives around a defining purpose: to create value for business and society.

 

Ideally situated in Canada’s largest city, U of T is at the heart of the third-largest financial centre, fourth-largest health sciences community and third largest biotechnology cluster in North America. Rotman is committed to leveraging our location for the mutual benefit of the University and city. Through strategic partnerships with multi-national corporations, NGO’s and governments both local, national and international, we are forging relationships that ignite leadership potential, accelerate the transfer of knowledge and increase economic prosperity in our city, region, across Canada and internationally.

The ESG Trading Initiative 2022

A Learning Experience supported by HSBC and the Rotman Finance Research and Trading Lab. The objective of this project is to give participants a unique opportunity to perfect their investment, leadership skills in a safe – yet high stakes – environment, and their decision-making skills focusing on environmental and sustainable practice when making financial decisions, using ESG rating as their guide to steer their portfolio towards sustainable finance.

 

This initiative will bring talented students from the Middle East region to experience the financial markets in a real-time environment using the Rotman Portfolio Manager (RPM) platform. Also, it offers students, and faculty, invaluable experience in intellectually stimulating environments using the RIT Market Simulator and associated Decision Cases platform.

 

More recently, we have seen a significant increase in the number of multinationals who are interested in exploring such financing opportunities. Each team is challenged to sort through vast quantities of information to find actionable insights, using the sort of problem-solving abilities that are required by today’s toughest global business challenges. Working in a team and playing to win is exactly what the Rotman International Trading Competition and Rotman Portfolio Management Competition is all about, developing a new way to think about business for an increasingly competitive world.

The World’s Best Bank for Sustainable Finance

In 2019, 2020 and 2021, Euromoney named HSBC as the World’s and Middle East’s Best Bank for Sustainable Finance, reflecting the strategic importance of sustainability to the bank and its customers. HSBC has the best ESG strategy in the Middle East:

Committed to net-zero across the region to engage with clients on ESG, sustainable finance, and their transition strategies.

Played a role in every public green, social and sustainable bond issuance in the region, have spearhead the development of green trade and transition financing, and substantially increased our balance sheet of green, social and sustainable lending across the Middle East.

Engaged with all our stakeholders on ESG and supported regional regulators with increasing guidance and policies, developing thought leadership and regularly hosting an array of webinars on ESG themes for our clients and the wider sustainable finance sector.

Launched and supported several social programmes that upskill and develop regional youth, SMEs, and those most in need of financial education.

The ESG Trading Initiative will help students develop the future skills they need to thrive.

 

Key objectives

• • Apply finance and market-related knowledge to real-life situations, considering the ESG (Environmental, Social and Governance) factors and compliance,
  • Have an opportunity to see how the finance industry works,
  • Hear from some of the industry’s most respected professionals,
  • Learn from each other in both competitions,
  • Familiarize users with order-driven markets and (limit and market) order types,
  • Teach users about the liquidity of markets and the impact of trading costs,
  • Provide a realistic borrowing environment that allows for margin loans and short selling so that users understand the implications of margin trading,
  • Familiarize users with a trading interface that resembles real transactional software used by financial institutions,
  • Teach users how order-driven markets contribute to price discovery.

 

Approach

Students from 42 universities from United Arab Emirates, Oman, Qatar, Kuwait, Bahrain, Egypt, and Algeria. Each participating academic institution will nominate a team of four students that will represent the educational institution, and the team will participate in two competitions:

 

Rotman Portfolio Management Competition @ HSBC (RPMC@HSBC)

Students will participate in teams of up to four students, and each team will start with an initial cash allocation of USD $1 million on Day1. Each team’s objective is to generate the highest risk-adjusted returns by the end of the competition period measured by the Sharpe Ratio. Participants may also short-sell any securities and trade on margin. The participants need to be able to build a strategy to manage a portfolio of securities with acceptable ESG scores by conducting research using their university resources to identify securities with acceptable ESG scores. Selected top-performing teams will be invited to virtually present their strategies and performance results to the judges to determine the overall winner. The acceptable ESG score will be defined by the judging panel.

 

Rotman International Trading Competition @ HSBC (RITC@HSBC)

The competition is predominantly structured around the RIT Market Simulator and associated Decision Cases platform, an electronic exchange that matches buyers and sellers in an order-driven market on which decision cases are run. The cases represent various scenarios for risks and opportunities with a focus on specific investment, portfolio or risk management objectives. Participants will be challenged to handle a wide range of market environments. The competition is composed of Three Market Simulation sessions, three learning sessions, and the Trading Competition using three cases: ESG Case, Liquidity Case, Commodities Case.