Finance finesse
MBA in finance can be your ticket to a lucrative career, writes Anvay Bhargava

Globalisation has created an environment of fierce competition in which companies are trying hard to reduce their overhead costs in order to maximise their profits. This, in turn, has led to search for professionals who can manage finances properly to maintain the financial viability and soundness of the companies.

The financial managers with a specialised MBA (Finance) degree can achieve this Herculean task. The roles of a financial manager are to supervise the preparation of financial reports, guide investment activities, and execute cash-management strategies.

The Path

Finance Management is taught as part of the MBA curriculum at all B-Schools across India. MBA is a two-year course after graduation or equivalent degree. Admission into the MBA course is generally held on the basis of a written test, group discussion and personal interview. Separate tests are conducted by different institutes like CAT by IIMs, MAT by All India Management Association, XAT by Xavier Institutes, MAT conducted by different states, etc. Besides, there are executive MBA (Finance) programmes offered by some institutions which require a minimum two years of corporate experience.

Job Scope

MBA (Finance) graduates can be employed as a finance controller, treasurer and finance officer, credit manager, cash manager, risk and insurance manager. There is a wide range of job opportunities for these professionals in banks, financial institutions, insurance companies, mutual funds and investment companies. Financial institutions such as commercial banks, savings and loan associations, credit unions, mortgage and finance companies also employ financial managers. To reduce risks and maximise profits, firms rely more and more on the guidance of experienced and knowledgeable financial managers in mergers and consolidations, and in international expansion and related financing. Firms increasingly hire financial managers as temporary consultants to advise senior managers on these types of business operations. In fact, some small firms hire contracting companies to handle all of their accounting and financial needs.

Nine roads to success

The wide range of financial careers can be simplified in nine broad categories like Commercial Banking, Investment Banking, Corporate Finance, Hedge Funds, Insurance, Financial planners, Private Equity and Real Estate.

• Commercial banks are in the business of providing banking services to individuals, small businesses and large organisa tions. The opportunities may start as a teller to a wide vari ety of other services such as leasing, credit card banking, international finance and trade credit.
• Investment Bankers help companies and governments issue securities, help investors purchase securities, manage finan cial assets, trade securities and provide financial advice; be ori ented toward an industry vertical, bond-trading, M&A advi sory, technical analysis or programme trading.
• The key to being successful is to have discipline, be broad- minded and be willing to admit defeat if an investment goes awry. Many money managers buy and hold fixed income secu rities including mortgaged-backs, corporate bonds, munis, agency securities and asset-backed securities. Others focus on equities, including small stocks, large caps and emerging market stocks.
• A Corporate finance professional would help a company to find money to run the business, grow the business, make acquisitions, plan for its financial future and manage any cash on hand. The work includes designing, implementing and monitoring financial policies, planning and executing the financing program, managing cash resources, and interfac ing with the financial community and investors.
• Unlike traditional money managers of mutual funds and closed ended funds, hedge fund managers routinely engage in short selling — that is betting that a security will decline in value. There are many flavours of hedge funds but the most common variety is a long/short equity fund. At present, we are in a period of unusual turbulence in the hedge fund world. Due to the financial crisis many hedge funds have shut down and undoubtedly more closures are to come. Depending on the size and structure of the hedge fund, there may be many positions like working at a hedge fund as a junior trader; strategist; analyst; quant; software developer; risk manager; and in various administrative roles.
• As the population ages and wealth grows, the demand for insurance professionals will increase dramatically. Jobs in insurance involve helping individuals and business manage risk to protect themselves from cat astrophic losses and to anticipate potential problems. Work in this area is not only per sonally rewarding, but can be financially rewarding as well. You will help clients understand their insurance needs, explain their options to them and hopefully help them purchase appropriate insurance poli cies. You could work in a variety of areas in insurance, including as an underwriter, a sales representative, an asset manager, a cus tomer service rep or an actuary. Major areas of opportunity include auto insurance, life insurance, P&C (property & casualty) insurance, and health insurance.
• Financial planners and wealth managers help individuals plan their financial futures. They help in planning for future needs like marriages, education for children, retirement needs, etc. This work requires excellent interpersonal skills. A good financial planner understands investments, taxes, estate planning issues and knows how to listen.
• The role of private equity is to raise funds from large investors and invest the money directly into businesses. The usual manner is to raise money from overseas investors and then find businesses in the growth stage. Most private equity funds ‘exit’ the investment after a period of time by selling their holding in the business to some other investors or doing an initial public offering of the shares.
  The entry level job in private equity is as an analyst (undergrad) or associate (fresh MBA pass outs or masters degree). You would typically be involved in a combination of one or more activities like spreadsheet analysis of the economics of a potential leveraged buyout, sourcing of new deals through industry research and screening of potential buyout candidates, preparation of materials for a senior partner on a potential investment target or company already subject to investment or coordination of the many diligence and research items required to carry out a transaction.
• Over a third of the world’s wealth is tied up in real estate. Real estate is collateral for mortgages and a large amount of financial assets. Jobs in real estate fields such as title insurance, construction, mortgage banking, property management, real estate appraisals, brokerage and leasing, and real estate development are good avenues for those with an MBA in Finance. In addition, many opportunities are there in corporate real estate and in real estate lending in commercial banks, savings and loans, and insurance companies. Of course, at present, the markets are weak in housing and real estate but this field is not going away.

There is a huge scope in this area as the economies are firming up.

The writer is Senior Lecturer at Jaipuria Institute of Management, Jaipur

Career Hotline
Spa space
Pervin Malhotra

Q. I have completed my Plus II in arts stream this year. I don’t want to do full-time graduation for three years. Instead, I want to start earning as soon as possible while pursuing my graduation through correspondence. I am looking for an off-beat career, which offers good money. I have been doing yoga since childhood and have an inclination towards alternative healing. Are there any options you can suggest?

— Manya Ahluwalia

A. You are just the right material for the spa and the wellness industry. A career in this emerging industry has many advantages to offer:

• Good pay package
• Quick career growth
• Opportunities for working abroad
• Pleasant, stress free work environment

From the long list of offerings, I think you could either opt for the ASI Spa Diploma (8-month) or the ASI Holistic Diploma (5-months). But there are several others you could check out as well.

Field of financial engineering

Q. I am a student of BCom (H). Could you please tell me something about financial engineering? What sorts of careers do financial engineers pursue? What courses are available?

— Uday Chauhan

A. Also known as financial mathematics, mathematical finance, and computational finance, financial engineering applies mathematical methods to resolve problems in finance.

Quantitative finance is a well-developed discipline that is gaining ground as global financial markets grow and become integrated.

Investment banks, commercial banks, hedge funds, insurance companies, corporate treasuries, and regulatory agencies employ financial engineers to tackle problems like development of new financial products, valuation of derivative securities, structuring portfolios, risk management, and scenario simulation.

Quantitative analysis has brought innovation, efficiency and rigor to financial markets and to the investment process. And as the pace of financial innovation accelerates, the need for highly qualified people with specific training in financial engineering continues to grow in all market environments.

Financial engineers apply their skills in a broad selection of finance-related careers, including the pricing and trading of securities, financial modelling, sales, risk management and portfolio management. The skills acquired in a good financial mathematics programme at the master’s level prepare students for many interesting fields. Moreover, as it is increasingly recognised in financial firms that computational and mathematical skills are critical to the success of all organisations, the market for students with financial mathematics degrees continues to broaden.

There are dozens of master’s degree programmes in financial mathematics and engineering around the world. Majority of these programmes are in the US, but there are programmes in Canada, UK and continental Europe, as well as nearer home, in Singapore and Hong Kong.

ISB, Hyderabad offers a six-month Financial Engineering programme to equip finance professionals (with more than five years of experience in the field) with sophisticated knowledge of state-of-the art financial economics and financial practice.

Mathematical Sciences Foundation & ICICI Bank, Delhi (www.mathscifound.org)

Offer two Certificate programmes for Undergrads and postgrads:

Programme in Mathematical Finance — A hands-on introduction to modern Finance and the role of mathematics in it.

Mathematical Simulation with IT: Explores the interaction between Mathematics, Technology & Education.

Know your mind

Q. My mother and father are both doctors. So it was always taken for granted that I would also follow in their footsteps. I like the idea of doing medicine because I know what it entails. But on the other hand, I have not explored any other option. Am I doing the right thing?

— Jeevan Baxi

A. If you grow up seeing your parents enjoy what they do, it’s natural to think about doing it yourself. And going into the same career can give you major advantages for sure. You will not only have grown up seeing what is required in the job, but also what is required to succeed in it.

Without realising it, you will have picked up a whole lot of ‘inside’ tips just listening to your parents talk about their work at the dinner table. Being able to bounce off ideas also makes a big difference, besides strengthening family bonds. You also have a readymade list of contacts that can make your entry into the field a lot easier.

The only flipside I can possibly think of is being “pressured” to measure up if your parents have been very successful in their field. But that can act as a great spur to better your achievement, which is a good thing.

It is equally important to consider your own interests and aptitude carefully because they can help you find a rewarding career. Some other factors must also be examined when exploring educational and career opportunities. Think about how your interests, abilities, experiences, personality, and values will influence your satisfaction and success. These factors are also important in career exploration — just as important as your interests. For example, certain fields require a lot more study and work than others. If you find that hard work and study don’t quite appeal to you, do take this into account when considering a career.

Pvt sector vs govt jobs

Q. I have recently completed my 
Master’s in Sociology. The economic downturn has made me confused whether to opt for private sector jobs or should I instead go for government jobs by appearing for the UPSC exams?

— Kiran Choudhry

A. I understand your anxiety, but you must not worry. While private sector jobs can be satisfying and well-paying, it’s a fact that in a downturn there is little or no job security in the private sector. Which is what is making Indian middle class jobseekers look at government jobs with renewed respect. In fact, the number of applicants for the UPSC exam this year has seen risen by 42 per cent — up from 2.8 lakh last year to a little over 4 lakh this year.

Apart from the recession, the rise in government salaries after the Sixth Pay Commission and a larger number of vacancies in the services seem to have played a big role in the resurgence.

The government’s decision to increase the number of vacancies for civil services by almost 100 per cent this year has also increased the number of applicants. The intake which was a mere 425 or so three years back, has now been increased to a respectable 881.

However, cracking the UPSC exam is no cakewalk. It requires a lot of steady and sustained effort to taste success. You’ll face stiff competition from some of the top notch professionals such as doctors, engineers and managers, etc. But if you fancy a prestigious government job and lay great store by job security, then stop worrying and start preparing for the exams in dead earnest.

Meanwhile, if you manage to land a decent job in the private sector, do give it a try. Your preparation for the exam, although easier said than done, can move in tandem.

On equal footing
Denying the chance of an interview to a candidate on the basis of the institution from where he passed out is unfair and it is time to weed out this bias, writes Varun Aggarwal

The other day, I was visiting a friend for dinner, when I got into a conversation with his younger brother Rohit, a fresh engineering graduate. He was having a tough time getting a job. Not that looking for a job was putting him down, but he was quite depressed with the replies that he was getting from various IT companies. The HR staff would invariably ask, “Which college did you study in?”, and then add, “We don’t hire students from that campus”. Rohit’s “brave” attempts at explaining how he had the best programming skills at his campus and that he had interned with a reputed IT-product company, usually fell on deaf ears. If you are not in their ‘list of campuses’, there is no chance for a written test let alone an interview.

I could empathise with him, as there was a time when I was questioned for my non-IIT credentials. I made an attempt to explain him why this happens from an economic perspective.

A recent study on trends in National Employability (IT/ITeS Sector) demonstrated objectively that while the probability of hiring from a top-tier campus for an IT-services company is one hire in three candidates considered, it falls to one in six for other campuses. The same numbers for an IT product company is one in 10 for tier 1 campus to one in 30 in others. This clearly shows that the companies have to make much more effort involving greater cost to hire candidates from institutes that do not fall in their ‘list’. The campus of the candidate is, thus, used as a proxy for his/her quality. The cost advantage of the same is quite apparent.

But is it fair to deny someone a chance, an opportunity, due to the campus he/she graduated from? Is there no way to remove this inefficiency from the market? How would you react if the IIMs say that we will consider people only from the IITs or the IITs say that we will only consider students from the top 100 most prestigious schools of the country?

Apart from the issue of equal opportunity to candidates, this skew creates an artificial scarcity in supply of good graduates. Even if we consider that the convert rate for non-Tier-1 campuses is three times lower for product companies, they would conservatively constitute 60-70 per cent of the people eligible for product company jobs. The figure is 75-80 per cent for IT services companies. However, these students don’t get a chance and hence the supply is perceived to be, at the least, the half of what it really is!

How do we fight such a mindset?

An innovative model to bridge this gap is in building a GRE/SAT for jobs — a campus-company neutral exam based on the best assessment technology in the world to build a system to find industry-readiness of a candidate. Conducting a company-agnostic modular test endorsed by over 40 companies at campuses across the nation has proved to be an effective step in this direction. Anyone can take the test and the companies give an interview opportunity to a candidate, not according to which campus the student belongs to, but as per his/her score in this standardised computer-based test following global standards. More than 1.4 lakh students from more than 500 campuses have taken the test over the past one-and-a-half years and over 35,000 students got an opportunity to an interview. Companies like HCL, iTrust, Godrej. Wirkle, Srishti Technet, Mphasis and Wipro BPO have already started following this model.

This new model makes the cost, effort and time of hiring candidates from Tier 1 or Tier 2 campuses the same, making the companies break the trend of hiring only from Tier 1 campuses. The score in this test makes the campus proxy redundant.

Besides, the college and students must make proactive efforts in building skills and competencies and changing the perception of companies. A good company is never averse to going to any city, town or even a village, if it is confident of finding the right talent there.

It is important to understand skills that are lacking in students of Tier 2 campuses. A study has revealed a gap of 20 percentile points in English communication, logical ability and computer programming, whereas the gap in quantitative ability is 27 percentile points. This clearly shows that maximum effort is required to hone math skills of students, whereas consistent effort is needed in other areas as well.

A study of the skills that create the employability gap between Tier 2 and Tier 1 colleges also revealed interesting results. It was expected that English would be the major factor for creating this skew. However, it was found out that the difference in English, Quantitative and Computer Programming skills were all between six to eight percentile points, whereas logical ability was slightly higher, up to nine percentile points. This breaks the myth that the major gap for Tier 2 cities is in English and personality. The gap is uniform across English, aptitude and computer programming skills. Universities and colleges thus need to identify the skill gap and appropriately make efforts to improve. Not only will it bring better prospects for students, over a longer period of time, it will bring a shift in the talent-supply gap and a better economy.

The writer is Co-founder and Director, Aspiring Minds

 

Job index shows growth Hiring activity in the IT- Software, Banking and Auto sectors is back to the pre downturn levels with the index moving up by 56 per cent, 47 per cent and 40 per cent, respectively in May-10 over May-09 levels A year-on-year comparison of the job index shows that Pune, Bangalore, Mumbai and Chennai have seen huge revival in the job market Professionals in HR, ITES, IT Software and Accounts witnessed a comeback in the recruitment scenario with job index moving up by 68%, 21%, 54% and 22% in May-10 over May-09 Although the May-10 index dipped by 10 per cent over the April-10 index, the three month moving average index indi cates a steady hiring scenario. Figures courtesy naukri.com

Fortnightly Quiz-364

cacophony, no symphony !

1. In which year did the Kanishka air tragedy take place ?

2. Which gas leaked from the Union Carbide plant in Bhopal in 1985, resulting in the world’s worst industrial disaster?

3. What is the full form of AFSPA?

4. Which state holds the annual Sindhu Darshan festival?

5. Which river, one of the largest tributaries of the Ganges, is also known as the “Sorrow of Bihar” ?

6. Which ace Indian shuttler clinched the second Super Series title of her career by winning the Singapore Open recently?

7. What is the mascot for the 2010 FIFA World Cup?

8. Which South American country scored its first victory in 48 years at the FIFA World Cup, in South Africa this year?

9. Which Argentine player scored the first hat-trick in the FIFA World Cup 2010?

10. Which trumpet, with ear-splitting noise blown by audience at the FIFA World Cup 2010, has drawn flak from many quarters?

— Tarun Sharma

 

Winners of quiz 363: The first prize by draw of lots goes to Manasvi Dhariwal, class X, St Mary’s Convent School, Patiala, Road Narwana, Pin Code - 126116 Second: Ruchi Bhatia, class VIII, SA Jain Vijay Vallabh Public School, Circular Road, Ambala City, Pin Code - 134003 Third: Abhay Gupta, class X, DAV Public School, near Ranital Garden, Nahan, Sirmour district, Himachal Pradesh, Pin Code – 134003 Answers to quiz 363: Rafael Nadal; Francesca Schiavone; May 31; Atlantis; Shimla; Tirupati-Tirumala devasthanams; Kerala; National Rural Employment Guarantee Act; Vishwanathan Anand; India Cash awards of Rs 400, 300 and 200 are given to the first, second and third prize winners, respectively. These are sent at the school address. Note: Kindly mention the pincode of your place to facilitate the delivery of the prize money. Answers can also be sent at quiz@tribunemail.com

Gearing up for green jobs

Recognising the importance of jobs that contribute to environment protection, Government and the ILO have come together to organise the first national conference on ‘green jobs' in New Delhi later this week to discuss emerging trends and policy options.

It will delve into issues relating to the creation of new green jobs, their adaption in existing forms of employment and share inspiring cases from India and around the world, said an ILO official, adding the conference will be held on June 24 and 25.

According to the United Nations Environment Programme, work in agricultural, manufacturing, research and development, administrative and service activities that contribute substantially to preserving or restoring environmental quality come under green jobs.

The conference will be organised by ILO in collaboration with the Labour and Employment Ministry. ILO is already working with the government for supporting transition to a greener economy with decent jobs.

Other key elements of the conference's agenda, said the ILO official, include employment and labour market implications of environment-related measures and promotion of green jobs in the Indian policy framework.

Besides, the agenda would include promotion of jobs which help in transition to more sustainable economies and societies and sectoral discussions related to renewable energy, waste management and green buildings.

Participants from various government departments, employers' and workers' organisations, international agencies, private sector players, civil society organisations and research institutes are expected to attend the two-day conference, the official said. — PTI

Happiness @ work
Gems of ancient wisdom
Nobody is indispensable

Some of us take our work too seriously and that is the cause of their misery and of those around them.

At the age of eight, Adi Sankaracharya realised his calling to revive Hinduism. He asked for his mother’s permission to take up sanyaas. “You are just a boy. Who will take care of you?” she said. “From now on, all women are my mothers,” he said.

In 1574, Bibi Bhani, daughter of third Sikh master Guru Amar Das and wife of fourth master Guru Ram Das, had taken a promise from her father that the spiritual leadership would remain in her family. As all his four sons had been martyred, Guru Gobind Singh, on October 7, 1708, “asked all Sikhs to accept the holy Granth as a living God” after him.

“How can Rama perform the Ashwamedha yagna without his wife Sita?” Narada asked sage Vishwamitra. After much deliberation, a golden statue of Sita filled the void left by Janaka’s daughter.

For killing Vritra by deceit, Indra, the King of gods, went into hiding. The gods went to King Nahusha and offered him the crown. “Who am I to aspire to the seat of Indra?” Nahusha said. “We hereby transfer all the merit and potency of our penance to you. Please take over,” the gods said.

The source of power for the Matysa kingdom was Kichaka, the commander-in-chief and brother-in-law of King Virata. In hand-to-hand combat, only Balarama, Duryodhana and Bhima were his superiors.

In the 13th year of their exile, the Pandavas, in disguise, were staying in Matsya. For troubling Draupadi, Bhima killed Kichaka in a duel. To draw out the Pandavas of hiding and to plunder the ‘weakened’ kingdom, Duryodhana and his allies raided Matsya from two sides. All five Pandavas stepped into the dead man’s shoes to ward off the attack.

Characters come and go, but the show goes on.

— Sai R. Vaidyanathan

The writer can be contacted at svaidyanathan@tribunemail.com