Ghost Month great opportunity to accumulate shares

LOW TRADING MONTH. As Chinese traders and investors avoid trading during the Ghost Month, Marco Nino Velasco, a trader at Maybank ATR Kim Eng Securities, says it is a great opportunity to accumulate shares of good companies during this month for those who don’t believe in the tradition. He, however, advised investors to do their homework first before pouring in their hard-earned money into these listed companies. (SunStar File)
LOW TRADING MONTH. As Chinese traders and investors avoid trading during the Ghost Month, Marco Nino Velasco, a trader at Maybank ATR Kim Eng Securities, says it is a great opportunity to accumulate shares of good companies during this month for those who don’t believe in the tradition. He, however, advised investors to do their homework first before pouring in their hard-earned money into these listed companies. (SunStar File)

AUGUST, considered as the Ghost Month in the investing community, is a great opportunity to accumulate shares, a Cebuano trader said.

Marco Nino Velasco, trader at Maybank ATR Kim Eng Securities, said this is also a good time for investors to do research on their investment plans.

“There is a very high correlation between the trading activity and the Ghost Month because businessmen and investors in the Philippines are predominantly Chinese or Filipino-Chinese,” he told SunStar Cebu on Wednesday, July 31, 2019.

The Ghost Month, a Taoist and Buddhist belief that “hungry ghosts” cause mischief on the seventh month of the lunar calendar, is considered inauspicious by Chinese investors. This year, the Ghost Month is from Aug. 1 to Aug. 29 in the China time zone.

According to Velasco, during this period, there is a high tendency of the market moving sideways because trading volume usually decreases as Chinese traders and investors avoid trading.

“It’s more of a tradition thing,” the trader said.

For those who don’t believe in it, it’s a great opportunity to accumulate shares of good companies, Velasco pointed out.

“After the Ghost Month, companies announce their third quarter earnings which gives a picture of how well the companies did for the entire year. It gives a glimpse of what to expect in the full year earnings disclosure in February or March the following year,” he explained.

Stocks of companies with very positive and impressive earnings usually go up and lead everything else, he added.

“To get an idea of what companies may report good earnings in the third quarter, the first half earnings may give some clues. First half earnings are already out during the Ghost Month,” Velasco said.

Do your homework

Velasco also advised investors to do research on their investments as trading activity is usually low during this time.

“However, everything is still preceded by the global market developments or lack of it. If anything good comes up globally, stock prices may go up and vice versa,” the Maybank trader said.

In the traditional Buddhist belief, many Chinese follow the Ghost Month tradition by avoiding making financial decisions such as opening a business for fear that it may give them bad fortune.

This period which normally falls between the last week of July and the middle of September is the time when ghosts and dead spirits are believed to come out of the Gates of Hell to access the world of the living.

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