PM03: Financial Markets Practitioner Qualification

Assignment Overview

Instructions

The global economy and financial markets in the 21st century are highly integrated. This means that economic and political events occurring anywhere in the world can influence local economies, financial markets, and asset values elsewhere. These impacts may be obvious in some cases, while in others, the links are less direct.

One such event with major, long-lasting global and South African implications is the Russian Federation’s invasion of Ukraine just over three years ago. This war remains ongoing and continues to shape economic and financial outcomes worldwide.

You are required to prepare a formal report (see structure guidance in Part B) for the investment team of a South African asset management company. Your report must include the following:

Section 1: Economic and Financial Impacts

Explain and discuss the short-term (immediate), medium-term, and long-term economic and financial impacts of the Russia–Ukraine war and its aftermath on:

1. Global and South African Economies

Including, but not limited to:

• GDP and economic growth

• Imports, exports, and trade flows

• Exchange rate movements

• Impacts on specific industries

2. Global and South African Financial Markets

Discuss the performance and impacts on:

• Equities

• Interest-bearing securities

• Alternative investments

3. Specific South African Listed Companies and Sectors

Identify companies/sectors directly or indirectly affected and explain:

• How they were impacted

• Potential ongoing risks or opportunities

4. Additional Relevant Issues

Include any other insights, links, or observations relevant from an investment perspective.

Section 2: Supply and Demand Analysis of a Chosen Commodity

Select a commodity affected by the war and construct a supply and demand graph showing:

1. Pre-Invasion Market Conditions

• Equilibrium price

• Hypothetical quantity

2. Short-Term Supply Shock

• Shift in the supply curve due to the invasion

• New equilibrium price and quantity

3. Subsequent Demand Shift

• Shift in the demand curve

• Revised equilibrium price and quantity

4. Impact on Listed Securities

Explain how fluctuations in the commodity’s supply and demand influence:

• Prices of associated listed companies

• Market sentiment and investor behaviour

For each point above, provide possible factors related to the Russia–Ukraine conflict that may explain the shifts in supply and demand.

Important Focus Notes

Although this report considers global impacts, your main emphasis must be on:

• The South African economy

• South African investors and implications for them

International impacts are still essential as South African investors often hold offshore investments and are exposed to global financial developments.

Research Expectations

• Read widely and use diverse sources.

• Do not simply copy others’ opinions—integrate your own reasoning.

• Support arguments with statistics, evidence, graphs, charts, or tables when appropriate.

• Demonstrate technical insight, strong argumentation, and critical analysis (per Section E: Assessment Rubric).

B. Length and Formatting Requirements

• Word Count: 3,000–5,000 words (excluding cover page, executive summary, TOC, references).

• Use evidence such as graphs, charts, tables or images and reference all external material.

• Include appropriate headings and divide your report into clear sections.

• Ensure you include an introduction and a conclusion.

• Formatting:

  • Line spacing: 1.5

  • Font size: 12

  • Font: Arial, Calibri, or Times New Roman

C. Referencing

Include a reference list at the end.

If preferred, you may use the Wikipedia referencing style (superscripts + reference list), though this is more time-consuming.

D. Plagiarism Policy

Review the ASISA Academy plagiarism policy on the Academy GRID.

Key expectations:

• Write the report mostly in your own words.

• Place any directly quoted text in inverted commas and reference it properly.

• Avoid excessive direct quoting, as it may negatively impact your marks.

Penalties for plagiarism range from 10% to 100% of the total mark, depending on severity.

Brief Summary of the Assessment Requirements

The assessment requires students to prepare a formal, research-backed report for a South African asset management team, analysing the economic and financial impacts of the Russia–Ukraine war. The focus is on both global and South African implications, with an emphasis on how these developments influence South African investors.

The report must include two major sections:

Section 1: Economic and Financial Analysis

Students must examine the short-, medium-, and long-term impacts of the war on:

1. Global and South African Economies

   • GDP and growth trends

   • Imports/exports and trade flows

   • Exchange rate volatility

   • Industry-specific effects

2. Global and South African Financial Markets

   • Equities

   • Interest-bearing securities

   • Alternative investments

3. Impacts on Specific South African Listed Companies/Sectors

   • Direct and indirect effects

   • Risks and future opportunities

4. Additional Relevant Investment Insights

Section 2: Supply and Demand Analysis of an Affected Commodity

Students must:

• Select a commodity impacted by the war.

• Present supply–demand graphs.

• Show pre-war equilibrium, supply shock, and later demand shifts.

• Explain how these changes affect listed securities and investor sentiment.

• Link each shift to war-related causal factors.

General Requirements

• Word limit: 3,000–5,000 words

• Use of graphs, data, tables, charts

• Strong referencing

• Clear structure with introduction and conclusion

• Original writing supported by evidence

• Adherence to formatting and plagiarism rules

How the Academic Mentor Guided the Student 

Step 1: Understanding the Task and Breaking Down Requirements

The mentor began by helping the student interpret the assignment brief, highlighting:

• The dual analytical nature (macroeconomic + micro/market)

• The emphasis on South Africa

• The importance of blending real-world data with theoretical concepts

• The need to structure the report into logical, clearly separated sections

This ensured the student had full clarity before beginning research.

Step 2: Designing the Report Structure

The mentor guided the student to draft a report template, including:

• Cover page

• Executive summary

• Table of contents

• Introduction

• Section 1 (with subsections for each required area)

• Section 2 (commodity analysis with graphs)

• Conclusion

• References

Creating this framework upfront made the writing process smoother and ensured alignment with formatting requirements.

Step 3: Research Guidance and Source Selection

The mentor explained how to:

• Identify credible sources such as IMF, SARB, UNCTAD, World Bank, JSE data

• Integrate multiple viewpoints rather than copy text

• Extract statistics on GDP, trade, inflation, exchange rates, and market indices

• Look for South African companies affected via energy prices, grain imports, logistics, and capital flows

This step taught the student how to gather strong evidence for economic and financial arguments.

Step 4: Writing Section 1 – Economic & Market Impacts

The mentor provided a step-by-step analytical approach:

1. Short-term impacts:
   Immediate disruptions, commodity price spikes, currency reactions.

2. Medium-term impacts:
   Supply chain strain, interest-rate adjustments, inflationary pressure.

3. Long-term impacts:
   Structural shifts in trade alliances, reshaping of energy markets, investment risk pricing.

The mentor then helped the student apply the analysis to:

• South Africa’s GDP, trade flows (e.g., wheat, oil), exchange rate fluctuations

• JSE equity sector performance, bond yields, alternative assets

• Specific companies like Sasol, automotive manufacturers, mining firms

This ensured the student covered all required sub-points comprehensively.

Step 5: Writing Section 2 – Supply & Demand Graph & Commodity Analysis

The mentor guided the student through an economics-based approach:

1. Select a commodity (e.g., oil, wheat, palladium).

2. Draw the pre-war equilibrium using hypothetical yet realistic data.

3. Explain the supply shock caused by sanctions, blocked supply chains, export restrictions.

4. Explain the demand shift due to substitution effects or global shortages.

5. Link the changes to financial markets, including:

   • Share price effects on companies tied to the commodity

   • Market sentiment reactions

   • Investor behavior (risk aversion, sector rotation)

By walking through these steps, the student understood how economic modelling supports investment decisions.

Step 6: Ensuring Academic Integrity & Proper Referencing

The mentor reminded the student to:

• Avoid copying external text directly

• Use citations appropriately

• Add a complete reference list

• Use data ethically and verify sources

This built academic writing discipline and reduced plagiarism risk.

Step 7: Reviewing, Editing, and Aligning with the Rubric

The mentor conducted a final review focusing on:

• Technical depth

• Clarity of argument

• Flow between sections

• Accuracy of graphs and data

• Consistency of South African investment focus

Revisions were suggested to strengthen critical analysis and ensure compliance with all instructions.

Final Outcome and Learning Objectives Achieved

Outcome

The student produced a well-structured, analytically strong report that:

• Explained the global and South African economic impacts of the Russia–Ukraine war

• Examined financial market implications across asset classes

• Assessed sector-specific and company-specific impacts

• Modelled supply and demand effects for a chosen commodity

• Linked all findings to South African investor considerations

Learning Objectives Covered

The mentor’s guided approach helped the student achieve the following key objectives:

• Application of macroeconomic theory to real geopolitical events

• Understanding of financial markets and asset-class behavior

• Ability to conduct evidence-based economic research

• Critical thinking and analytical writing in investment contexts

• Use of graphs and economic modelling tools

• Evaluating company- and sector-level impacts

• Clear academic communication and structured report writing

• Ethical academic practice and proper referencing

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