KUALA LUMPUR (Oct 31): MIDF Research has maintained its 2016 year-end target for the FBM KLCI at 1,750 points and said the wealth of studies regarding the “Turn of the Month” effect is statistically conclusive that stock prices generally rise during the last four days and the first three days of each month.
In a strategy note Oct 27, the research house said therefore it was possible to capture a substantial part of equity return only during this fraction of market time.
It said that 87% of FBM KLCI constituents exhibited Turn of the Month effect.
“Based on our 10-year quantitative studies, 26 out of the 30 FBM KLCI Index stocks performed better during the “Turn of the Month” strategic days as compared to the rest of the month days
“The 4 Stocks that did not perform according to strategy, in which the strategic days’ returns were less than the rest of the month’s return based on our 10-year studies, were Public Bank Bhd, IHH Health Care Bdh, Maxis Bh and Hong Leong Bank Bhd,” it said.
The research house’s top five picks were IOI Corp Bhd, AMMB Holdings Bhd, Kuala Lumpur Kepong Bhd, Telekom Malaysia Bhd and CIMB Group Holdings Bhd.