Are we suffering from PGMS (Pre-Ghost Month Syndrome)?
“Ghost Month” comes from the Chinese observation of the Ghost Festival in August, when the gates of hell are believed to be opened, and the ghosts roam free looking for food and fun.
While the actual start of the Ghost Festival depends on the Lunar Calendar, and changes slightly from year to year, it’s taken on something of a colloquial meaning for the Philippine Stock Market to apply to the entire month of August. I mean, “Au-ghost”, amirite? It’s just science.
Anyway, the thought is that there is a downturn in investment activity during this festival because the ghosts are believed to interfere and bring bad luck for investment decisions made during this time.
That said, it’s not like PSE volume drops to zero, so some people have to be buying and selling shares! How have investors fared during the past 10 Ghost Months? Taken as a whole, measuring the value of the PSE from August 1 through August 31, for all years back to 2012, investors are down 2.6%.
That’s not great, but the negative performance isn’t uniform.
Half of the past 10 years have seen negative performance in August; -2.1% in 2012, -8.6% in 2013, -6.6% in 2015. -2.9% in 2016, and -1.0% in 2019.
We just had the most profitable August in recent memory, +8.3% in 2021 (part of the continuing COVID recovery), but that kind of recovery momentum is definitely not the contextual moment that we find ourselves in right now. Sharp drops are more common than sharp pops.
MB BOTTOM-LINE
The Ghost Festival doesn’t even start until August 12 this year!
Why does the market feel so thin already? For even the most casual of observers, July has been... uneventful.
The MB Market Calendar is already empty for the month, and it has been for quite some time. No IPOs. No big events.
A few low-profile earnings reports, but the vast majority aren’t expected to hit the PSE’s disclosure server until sometime in early August.
Has Ghost Month come early? From a sentiment perspective, I don’t know many confident investors right now.
We’re down 2% over the past month of trading.
Lots of short-term traders are in cash, waiting for more market conviction. Lots of longer-term traders have taken a more defensive stance while the red slowly swallows their positions.
To me, it feels like the ghosts are early this year. Feels like we’ve got some of that PGMS.
Only question is whether it’s going to get worse as we stumble into the real Ghost Month?
Not much in the calendar that we could use to jump-start the market.
Solar Philippines NEC [SPNEC 1.56 1.89%] SRO will go on sale in late August and list in mid-September, so maybe that will provide some intrigue that we can get excited about? Grasping at straws here.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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