During major festivals such as Christmas or year-end, market players would take a holiday from their daily participation in the stock market. The stock market takes a holiday. This lead to less market activity and consequently, will usually cause a correction in the price and volumes of the stocks in the market.
The stock market in Malaysia is no different; market players take a holiday during certain periods like other market around the world. Here is a list of periods when the stock market pauses and takes a break in Malaysia.
School Holidays
The annual school holidays are often the most common times when the stock market is quiet – this is the period where major market players treat themselves and their families for a holiday. It is certainly not a good time to be active in the stock market!
Schools in Malaysia are divided into two terms – so there are term 1 holidays and term 2 holidays. Other holidays that make up the full school holidays include the mid-term holidays and the end-year holidays. For 2015, the school holidays for Kuala Lumpur are -
Term 1 March 14 to March 22 (9 days)
Mid Term May 30 to June 14 (16 days)
Term 2 September 19 to September 27 (9 days)
End Year November 21 to January 3 (44 days)
TOTAL : 81 Days!
Major Sports Events
Major sporting events are periods where the stock market takes a break especially major sports events like the FIFA World Cup football tournaments, the UEFA European Championship football tournaments, Olympics Games and Commonwealth Games. Other sports events like Winter Olympics, Super Bowls (American football) and World Series (Baseball) and African Cup Football tournaments do not have much impact because they do not have a large fan base in the country.
Major Festivals
The major festivals are the Chinese New Year, Hari Raya Puasa, Deepavali and Christmas holidays. Its’ usually a time when the market is quiet. These are the periods where market players take a break from work and return to their kampungs to visit family members, relatives and friends. The duration of the festivals are -
Chinese New Year - 14 days
Hari Raya Puasa - 30 days of fasting + 30 days of celebrations
Deepavali – 1 day
Christmas – 1 day
TOTAL : 76 days!
The stock market often takes a break for Hari Raya Puasa during the 30 days fasting period and will come back after the fasting period ends (for the celebrations!). For the Chinese New Year though, the stock market is usually bullish prior to the Chinese New Year and could last up to a week after the festival started. As for Deepavali and Christmas, the effects on the stock market are negligible as it is only a 1 day holiday.
Other Events
Some natural events occurring in the last 20 years that cause the stock market to take a break is the smog or haze during dry season and the occasional H1N1 flu virus. Logic is the stock market becomes quiet if these two catastrophic events were to happen because the overall economy activity will suffer because of them. (However, glove manufacturer stocks will rally due to H1N1 flu virus because demand for rubber gloves to hospitals will increase.)
Conclusion
Major holidays like the school holidays and festivals and sporting events are known to cause the stock market to take a holiday in Malaysia. During these events, the stock market is quiet and the share prices either drop or do not move much.
Knowing about when the stock market takes a temporary holiday could be useful if you are a trader or investor looking out for good investing and trading opportunities during these significant events in the stock market.
