Funds management companies in China are employing a clever strategy to identify promising graduates – a real time mock share trading competition involving 5,000 candidates with the top 20 being awarded internships.

While Shanghai University of Finance and Economics is behind the initiative, which begins today (April 10) and will run for six weeks, the exercise allows asset management groups to track how potential employees perform in a realistic market environment, albeit without real risk.

Students are given seed capital of 200,000 Yuan (approximately US$25,300), a mock trading account and access to a real-time software trading platform, which is connected to the Shanghai Stock Exchange.

After the exercise closes on May 23 the most profitable trader will be awarded up to 10,000 Yuan (approximately US$1,265), while the top 20 candidates will be granted intern roles at investment management companies.

The competition will rank traders automatically according to the market value of each portfolio and also provide daily commentary on how contestants are performing.

Performance, however, is likely to vary considerably if the findings from a survey by the Shanghai University of Finance and Economics are anything to go by.

The survey found that nearly 60 per cent of university students in Shanghai have indicated a keen interest in trading shares,yet only 3 per cent pointed to having a solid understanding as to how markets work.

The Shanghai Composite Index rocketed 130 per cent in 2006.

Shanghai Theofund Investment and Management is the primary sponsor of the competition.