Finally, I was asked to come in. It was a panel of two, I greeted them politely and started to answer the first question everyone asks, “Take me through your CV.” It took me about a minute to explain that, and by the end, it was apparent that I am no more than an engineer, with no finance background. The panel accounted for that while asking me questions on finance. There were questions around balance sheets, the CAPM model, its assumptions and a few financial ratios. I was asked to answer a few profitability ratios, and my first answer was sales over assets. There was no going back from there. Smiling the panel explained that it is necessary for a profitability ratio to have a term of profit. Shaken from my blunder, I could not come up with a single name. I just proceeded to state the formulae with the significance and apologized for not knowing the name.
Then they tested my knowledge of the projects done by me during graduation. None of them had any relation to finance. Later during my internship, one of the panelists explained that even he did not understand my projects until I described them. So, the only thing they were looking for was if I know them and how much was my contribution to the group.
An interview is not just an evaluation but also a negotiation. With no prior practical experience in finance, I could not know if this is the right field for me. The panel pointed out the same. I simply replied that the internship would be the best environment for me to decide on that choice. If nothing else, I have committed two years of my life to MBA, to understand finance. The results came the next day and my two months in HSBC were set in stone.
I will skip past the boring paper-work and formalities, as the first day went just in filling forms. I never knew there were so many regulations that a researcher, and a banker in general, has to follow.
Close to the end of the day, we were taken to the research floor, to meet our teams. I was going to be the part of the “Equity Strategy” team. Wait! What? Isn’t it equity research? In equity research, you research on specific stock/equity and share your opinion on the same. In strategy, a researcher shares his view on the investment strategy itself. To give an example, assume you want to make an investment fund. How will you select the type equities for your fund? All growth? Maybe some value stocks. How much of cyclical stocks? You do know that you need to have defensive stocks too. So, the investment strategy, without getting into the details of which exact stock, is equity strategy.
My project was to give recommendations on a set of nations, whether an investor should go overweight or underweight on the equities of the country with respect to a selected benchmark. A significant part of the work was data gathering. The hours I had to spend searching through the reports and data monitors, I still have nightmares about them.
But it was not all bad. Instead, it was great mostly. You could walk to anyone, ask anything and you will be helped. I cannot overstate my ignorance of finance at the beginning of the internship. I was grilled to my limits, taught when needed and left alone to figure it out myself.
My equity reports were a nightmare for my mentor :D. After one year of MBA, you would think that writing reports should be a piece of cake. Well, it is not. It took me a day to write my first, remotely acceptable, one-page report. Either the language is informal or misleading, if that’s not the issue, then I am too verbose. The formatting issues of graphs were my nightmares. But my team helped me through; now my reports at least make sense.
But the biggest thing you notice is the Chinese wall and the compliance issues. So, research has to be an independent function. Whatever a researcher writes in his/her report should be their thoughts with no external bias. HSBC also has an investment banking division. What if a report we publish hurts the investment banking division by taking away a client, or a client from retail banking? That’s why there is an imaginary wall between the transfer of information from the research department to other departments of the branch.
Even the email-ids which we got initially were no external mail-ids. Which means that I could send emails only within HSBC. There is a strict clean desk policy. We are not supposed to leave any document on our desk when we leave the office. The data has to be adequately backed up. No entry inside the office without an ID card. The gates would open only after you scan your card. You could be locked in (or out) if you scan your card twice at the same gate. The absence of my picture from the cover is an agreement I signed which states no photograph policy in office.
But, you get used to that very quickly. What I liked the most about the place was the friendliness of the people. We had regular events which were engaging and fun. My favorite was the treasure hunt. The ‘pyaaz kachori’ was amazing. And it’s an interesting site to see an intern running around the office with an orange shoe in his hand (you got to win the hunt).
Two months flew by too quickly. I am now at least decent in finance. Hoping to continue my learning further. The moral of the story: engineers can do finance also. 
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