You can always tell Christmas is on its way when volumes on the market start to dip. In previous weeks, we saw volumes of 1-2 bln in the morning session alone, even before traders headed off for makan. In recent days, volumes have started to fall with just a few hundred million shares traded by lunchtime, and daily totals falling short of even the 1.5 bln mark. But this is precisely the time to be extra vigilant.

Wednesday's trade on the Singapore equities market totalled 1.45 bln shares worth S$1.73 bln. Previous days in December looked little different. This despite the heavy going on US markets, with gut-wrenching declines one day, followed by soaring gains the next. If there is any heart we can take from the falling market (down around 80 points over the last two days, at time of writing), it is that it is falling on low volumes. We are not seeing a huge rush for the exit.

But before you think the market is going to go slowly and quietly to sleep, be reminded that the Christmas New Year break is precisely the time companies with bad news to announce are waiting for. They can meet their continuous disclosure obligations by announcing the news to the market, comforted in the knowledge that many traders and investors are either already in party mood or on holiday, or too drunk on eggnog and mulled wine to notice.

Fact is, the Christmas New Year's break is especially exciting because of the various profit warnings, deals-gone-sour and other shareprice-destroying news that will likely be put out there. Picture investor relations executives, grimacing as they click 'submit' on the announcement to SGXNet at 2am on Christmas Day.

Investors and traders returning from the holiday break in early January would do well to read our wrap of "What you missed over Christmas", and punish those companies shrewd enough to take advantage of the special time of the year in this way by selling them down doubly hard.


Mark Laudi

Labels: Christmas, New Year, profit warnings, SGXNet, volumes