Financial Engineering?

[arrowhead30]

Aside from DLSU, do any of the universities here in the Phils offer MS Financial Engineering? If yes, where can I view the schools MSFE curriculum here on the net? Thanks.

[Lek-Lek]

I think only DLSU-CBE offers the MS Financial Engineering program. UPD-CBA has the MS Finance program, which focuses on the broader topics of corporate finance and investment analysis.

[Moon Goddess]

Ows? Merong ganon sa Benilde? Baka naman maging katulad lang yan ng tipong Management Engineering ng Ateneo or yung Communications Management nila. Hindi naman sa inu-undermine ko ang MSFE ng Benilde. Kaso kase halimbawa, may narinig akong graduate ng Com. Mgt from Ateneo na walang mahanap na trabaho dahil sa kawirduhan ng course niya.

Pero sa bagay, mukha namang mas may sense ang MSFE ng CSB kaysa sa Com. Mgt ng ADMU. Ewan ha. Para lang sa akin iyon at hindi ko ipagdidikdikan o iuumpog ang pananaw na ito sa mga ulo ng mga taong hindi sumasang-ayon sa akin.

Sabi nga ni Voltaire: Hindi ako suma-sangayon sa sinabi mo subalit ipagtatanggol ko hanggang kamatayan ang karapatan mong sabihin iyon."

So goodluck sa CSB for this new course. Teka, bago nga ba siya? O basta, continuing the excellence of De La Salle University in Finance whether by DLSU-CSB or DLSU-Manila or even DLSU-Dasmarinas is always true to DLSU's tradition of excellence. Lets just continue to achieve! Goodluck CSB!

*okay*

[arrowhead30]

Moon Goddess: MSFE is a new program being offered by DLSU's College of Business and Economics (CBE), and definitely NOT Benilde (CSB).

To those who are interested in finding out what this is all about, the curriculum for the MSFE program can be found at:

www.dlsu.edu.ph/continuing/cbe/msfe.html (http://)

At this time in the Phils., the course is only available at DLSU.
I'm trying to figure out whether I should go for this since I really like its curriculum, or to go for an MBA.

Another question: what do you guys think the advantages or disadvantages of taking such a course would be?

[Moon Goddess]

NGYAH!

Sa CBE?! Ganon?!

Anyway, still the same reaction.

KAsi ano namang pagkakaiba non sa MFI? At baka naman magimbento na rin ng mga nakakatawang courses ang DLSU-Manila niyan, lalu na sa CBE. Ano yon? Pantapat sa mga imbentong courses ng Ateneo School of Management na meron pang Management Engineering at Chemistry Management?

Ohh well, sana magtagumpay sila dito.

Sa bagay, nung una, experiment lang naman ang Advertising Management sa MArketing Department and yet namamayagpag ang Advertising ngayon.

Malay natin. Sana successful nga.

[Lek-Lek]

Originally posted by Moon Goddess
NGYAH!

Sa CBE?! Ganon?!

Anyway, still the same reaction.

KAsi ano namang pagkakaiba non sa MFI? At baka naman magimbento na rin ng mga nakakatawang courses ang DLSU-Manila niyan, lalu na sa CBE. Ano yon? Pantapat sa mga imbentong courses ng Ateneo School of Management na meron pang Management Engineering at Chemistry Management?

Ohh well, sana magtagumpay sila dito.

Sa bagay, nung una, experiment lang naman ang Advertising Management sa MArketing Department and yet namamayagpag ang Advertising ngayon.

Malay natin. Sana successful nga.

Two points:

First, hindi imbento lang ang Financial Engineering. The book Principles of Corporate Finance by Richard Brealey and Stewart Myers defines Financial Engineering as combining or dividing existing instruments to create new financial products. This field is all about innovation in the financial arena. How do you come up with products that will suit to a client's specification, say, with regard to riskiness? An example of a product of this field are convertible bonds--debt instruments which can be converted into shares of ownership at a certain future time. Financial Engineering is already being studied in a lot of US business schools. In fact, a lot of books have been published on this subject matter.

Second, I would like to say that Ateneo's BS ME and BS MAC are not plain imbento, as you perceive or understand the word to be. These courses are the products of innovative minds, and in a way, they have been invented, but not whimsically since these management courses have been designed in order to address specific needs in certain Philippine industries. BS ME is a highly mathematical course that emphasizes the scientific aspect of decision making. ME graduates are expected to become innovators of organizational processes and the like--that's why they have such courses as Operations Research. As far as I know, a lot of the favorite recruits of multinationals such as Procter and Gamble and Unilever are ME grads. BS Management of Applied Chemistry on the other hand is targeted obviously for manufacturing and chemical industries. The course sprung from the belief that an effective manager MUST understand the processes done on the floor. Chemical companies of course will need managers who are well-informed with regard to the technical production process. BS MAC graduates then are expected to become more effective since they understand the very nature of the firm's existence, rather than having a vague image of what is being done on the floor.

Besides, who says that we should only offer formula management courses? Today's business world is very complicated. Management education has to be constantly adjusted in order to respond to changes. Courses will have to be proactive in the sense that they should be able to anticipate changes, and at the same time, reactive, adjusting to current trends. That's the essence of management education, right? Managers should face the challenge of change in a very dynamic environment.

[mac_bolan00]

Originally posted by Lek-Lek

Two points:

First, hindi imbento lang ang Financial Engineering. The book Principles of Corporate Finance by Richard Brealey and Stewart Myers defines Financial Engineering as combining or dividing existing instruments to create new financial products. This field is all about innovation in the financial arena. How do you come up with products that will suit to a client's specification, say, with regard to riskiness? An example of a product of this field are convertible bonds--debt instruments which can be converted into shares of ownership at a certain future time. Financial Engineering is already being studied in a lot of US business schools. In fact, a lot of books have been published on this subject matter.


i may have interpreted brealey and myers differently but i understand financial engineering to be related not so much to specific instruments or risk but rather creating/maximizing shareholder value through the two main activities in long-term finance:

investment decisions and financing

determining value creation from investments is easy enough. value created through a financing decision is a lot trickier. it takes creativity and research. small things like the net present value of the annual tax shield created from additional bank borrowings to stickier things like value (meron ba?) from modifying one's capital structure and dividend policy.

but to be honest, practically every finance professional, whether a controller, a bank account officer, a stock broker or analyst applies the tools of financial "engineering". it's really just basic financial management woth a long-term time fram and greater theoretical basis than simple accounting.

[Moon Goddess]

Nakuha mo lek-lek ang sinabi ni Mr. mac_bolano? Yun din ang punto ko. Mag-iimbenta ka pa ng course e dapat naman, bilang isang taong graduate ng Management of Financial Institutions, alam na niya kung paano pupunuan ang mga pagkukulang o tutugunan ang mga problemang kinakaharap sa kanyang field.

O sige, pwedeng magkamali ako sa BS ME ng ADMU. Pero meron paring hindi nakakuha ng trabaho with a Comm. Mgt from Ateneo. Pero hindi ako bilib dun sa explanation mo sa BS MAC. Ewan ko, parang bola lang. Ewan ko ha, sa akin lang.

Sabi naman sa iyo, hindi ko ipinagdudukdukan sa utak mo ang sinabi ko.

Okie? Peace.

[arrowhead30]

well guys... from what my professors in MFI have been telling me, lek-lek's definition of financial engineering (combining or dividing existing instruments to create new financial products) is the more familiar definition (to me). if we were to limit FE to mac_bolano's definition... e di wag mo na kunin yung MSFE kasi nasa MFI na nga...

Moon Goddess: ano nanaman pagkakaiba non sa mfi? a lot... although MFI does cover certain aspects of FE, the masters program delves deeper into the mathematical side of finance, particularly on the creation/modification etc. of derivative instruments. anyway, just check out the site I posted above if you really feel like taking this further...

just to sidetrack a little, if Mgt. Eng. is what lek-lek describes it to be, then the 2 courses (ME & FE) are very different. Neither course is "imbento" lang.

anyway, the reason I asked about this here in pex is to get opinions from those who are working already (in finance). Assuming we've cleared up the difference between MFI & FE, what else do you guys think are the advantages or disadvantages of taking the said MS degree, as compared to having an MBA (for example...).

[sum1]

I hate to agree with my Atenean friend Lek-lek, whom for many times have 'fought' with me over the Ateneo-LaSalle thing. But her definition is the better one.

:)

Before the MSFE programme of La Salle was even conceived siguro (last year pa), I thought of taking an MSFE degree some place else. So I've searched the net for this thing, and here are my conclusions.

1.) Around the world, the best MSFE programme is supposed to be that of the UCLA Haas School of Business/Management (check niyo nalang).

2.) In our side of the world, there's the NUS and NTU (both in Singapore).

3.) Another term for MSFE is supposed to be computational finance or quantitative finance. The Carnegie Mellon is the best school for this supposed to be.

Comparing curricula, puro options, futures, and other derivatives ang tinuturo. Ang problema lang nga sa Philippines, the first derivative natin was the currency swap last year? (tama ba to?) so medyo huli tayo sa mundo, and medyo mahirap ituro sa atin kasi di mo nakikita ang application sa Philippine setting.

Kaso medyo capable naman ang MFI dept. magturo iff dagdagan lang niya ang faculty niya ng mga nakapag-aral somewhere out there ng FORMAL finance theory, rather than learning by experience in the banking industry.

Kaso you're safe if you take it, since Angelo Unite would be teaching Corporate Finance, if I'm correct. Siya lang daw ang only Ph.D. in Finance na nagtuturo ngayon sa Philippines. (Correct me if I'm wrong).

Dun naman sa MFI thing, sorry but if you look at the name of the degree itself, it's MANAGEMENT of financial institutions. not finance really, so i would like to conclude that there are no undergraduate degrees in finance in the country. (others are bs commerce major in..., and not bs finance or something).

my two cents worth lang naman.

[ferrisb]

moon goddess is clearly shooting from the hip here.

if you look around, moon goddess, even graduates with degrees in CS or MIS can't find jobs. pati nga dito sa US eh. that doesn't make their course or their knowledge in the subject matter irrelevant. besides, a sample of ONE Comm Mgt grad HARDLY represents the entire comm mgt graduates.

think first before you open your pie-hole.

back to the topic...

an MSFE degree will probably open more doors for you abroad than locally. if that is your thing, go for it. an MBA gives you more breadth (not necessarily depth) of knowledge in business management. good luck.

[mac_bolan00]

my point is, "financial engineering" is being practiced by finance professionals in nearly every industry. it's just an application of very basic concepts in long-term finance. there's hardly anything new here. the fact that there is a masteral course dedicated to FE doesn't prove FE's importance or that new developments are occurring. new course offerings, especially in private universities are often demand-driven. either that or, schools just want to differentiate their offerings from others to stay competitive. that's the ugly truth about new course offerings. if i were to take a higher business course, i'd still want to round all management aspects, not just one sub-topic in finance.

[roadrage23]

Originally posted by sum1
Ang problema lang nga sa Philippines, the first derivative natin was the currency swap last year? (tama ba to?) so medyo huli tayo sa mundo, and medyo mahirap ituro sa atin kasi di mo nakikita ang application sa Philippine setting.

Hindi naman tayo ganoon kahuli.

It's just that a lot of Philippine derivatives-related deals are not usually reported by the media. Way back in 1995, there was the first public issuance of mortgage-backed securities guaranteed by the Philippine Government. I recall that the undergraduate degrees of the investment bankers who crafted the deal structure were engineering (Ateneo) and accounting (La Salle).

Not bad for a couple of non-financial engineering majors, if I say so myself.

[Hulk]

roadrage23 is right, derivatives have been in the country for a while now. It started prevalently in the currency market somewhere in 1994. Products that came out of these were currency swaps, currency forwards and to some extent currency options. However in 1997, BSP tightened its screws on these types of activities and required that FIs should have a derivatives license before they could engage in derivatives. Presently only a handful of FIs have a license.

However there are still a lot of derivatives action going on especially in the investment banking front. Imbedded derivatives in underwritten instruments and structured deals are normal. Most of our foreign loans secured by the BSP from the foreign banks have derivatives in them.

Now with regards sa FE definition, financial engineering could indeed be defined broadly, but the most popular definition remains to be the breaking down of financial products to come up with new ones.

I don't really know if such a specialized course would be significant at this point. On one hand, the local financial market is just developing so there's a number of product development action going on. However limited pa rin yung market, the commercial side is still dead, so I don't know if graduates of this course could be absorbed by the FIs.

In my experience so far, sufficient na yung normal business course plus the training that the company provides to come up with products. Actually the biggest headache in coming up with products does not come from its financial aspect but from the legal aspect. Sakit sa ulo talaga ang mga lawyers (no offense meant). Lahat bawal. Dito talaga macha-challenge yung creativity mo. Another headache comes from the accounting aspect. MEdyo deficient yung GAAP natin so it will entail alot of research and advisory costs. It's always a plus kung CPA ka.

Now if only there's a course that will teach you how to deal with lawyers and accounatnts (oops, accountant pala ako). :D

:frank: