Generous mood before Christmas for STI

Days leading up to Christmas Day are always joyous. It is also a season of giving. People tend to open their wallets to buy things. It is also the month of bonus in people’s pay packets. Did this mood of generosity translate into stock market movement?

I did a study of the Straits Times Index (STI) for 22 years from 1992 to 2013. I compare the STI seven days before Christmas and the STI on Christmas Eve and tabulate the changes in the STI.

Year

7 days before

24-Dec

Change

2013

3067

3127

2.0%

2012

3158

3168

0.3%

2011

2659

2676

0.6%

2010

3153

3143

-0.3%

2009

2813

2837

0.9%

2008

1779

1736

-2.4%

2007

3353

3434

2.4%

2006

2931

2942

0.4%

2005

2325

2328

0.1%

2004

2057

2055

-0.1%

2003

1723

1725

0.1%

2002

1343

1337

-0.4%

2001

1558

1581

1.5%

2000

1948

1902

-2.4%

1999

2372

2446

3.1%

1998

1366

1392

1.9%

1997

1569

1573

0.3%

1996

2176

2187

0.5%

1995

2203

2287

3.8%

1994

2169

2219

2.3%

1993

2280

2326

2.0%

1992

1468

1488

1.4%

Out of 22 years, STI rose 17 times. There were two years (2008 and 2000) when the STI declined 2.4%. These can be attributed by the Global Financial Crisis and the bursting of Dot-com Bubble respectively. Of the 17 times when the STI rose, STI rose more than 1.0% in 9 years.

As for this year, the STI jumped 2.0%. This was just for seven days and it was significant. In a recent purchase of UOB the price paid for was $20.07 on 16 December and it was sold on 23 December at $20.77. The price jump was 3.48% in just seven days.

It appears that the generous mood leading up to Christmas was something to consider in investment decisions during this period.

Copyright © 2013, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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