The calender effect had been discussed so many years in academics and it had been occurred many times in the stock market as expected (by some professionals). Here are sharing of some special calender event that may take place in the klse stock markets:-
1) January effect
January effect is a hypothesis that there is a seasonal anomaly in the financial market where securities’ prices increase and fluctuated more volatile in the month of January more than in any other month. This calendar effect would create an opportunity for investors to buy stocks for lower prices before January and sell them after their value increases.
2) Chinese New Year Effects
In this period, people tend to throw shares and liquidate them so can have extra money to buy stuff for the festival. So, the market will indicate an supply signal.
3) Annual National Budget Effect
Usually before annual budget announcement the stock market index will face heavy down or heavy high. This is due to investors are expecting there will be a news that will move the stock market to a level as new policies and incentives introduced to the country. For example, Sin Tax that imposed on certain products which produce harm to society, as in Malaysia, gambling, alcohol and tobacco products will face more fluctuation few weeks before annual announcement of national budget. There will be expectation of increase in price in future such as government introduce new technology for its operation to serve the public. This will eventually increase the price of the IT companies that expected gain from the government projects. Same goes for infrastructure companies for country development projects. Besides the attention to incentives or punishments to certain industry, other attention of national budget is the national debt level. The higher it is, the danger to invest into the country. It may means the country might face difficulties in settle its own debts and losing in investing and many private entities goes bankrupt as unaffordable to survive in the country which can damage one’s economy.
WDew Research Centre 