Important key dates to know on Corporate Announcement and how it affect short term traders and how to capitalise on it
This weekend I will be sharing on this key aspect to let traders understand important information to help in your trading. Usually during this period, less share and less float will appear as key personnel from the listed company especially their staffs cannot trade. Also do note that any company share buy back by the company will also have to be stopped during this black out period. Staffs are usually told through company internal Memo that they cannot trade the shares during this window period. A classic example is Best World shares today as today mark the start of the cannot trade Black out period from 21st Oct to 1st Nov.
Below is the rule that traders or investors need to take note:
Officers and employees of the Company two weeks before the announcement of the Company’s financial results for the first three quarters and one month prior to the announcement of the full year results (“Black-out Period”). Usually there will be internal memo to notify and remind all Directors, officers and employees of the Company on compliance with the best practices on dealing in securities pursuant to Listing Rule 1207(19)(c), in not dealing with the Company’s securities during the Black-out Period. The Company, its Directors and officers should be aware that the Company should not deal in its own securities (including undertaking any share repurchases) during the Black-out Period. Therefore, the Company would wish to complied with the Listing Rule 1207(19)(c) and not run foul with SGX.
Key note to understand on above points are, if the players of the company shares belong to insiders, then during this period there may be less buyers and harder for you to run or sell your shares. Also if the company is undergoing share buyback and supporting the share prices through daily share buy back, the price may tank during the 2 weeks of no buying from the company or 4 weeks if it is the full year listing result period. So for those who trade heavy, be prepared to reduce your position 2 weeks prior to quarter result announcement due to less liquidity.
On the other hand, if the company shares are being played by outsiders, then usually the shares will go higher as less resistance from internal people to sell the shares to them as this is company "black out" period. If you see the start of moving up of shares during "black out" period, it is likely this counter is being played by outsiders or BBs not related to the company. Is good to find out who are the players from market rumours, their style of playing. The art of trading is not so simple as I analyse on fundamental and corporate information so the impact is great. There is no free lunch in this world so from my sharing, go study the correlation between "black out" period and company share prices. There are so many companies in SGX for you to find one that you can make money from it.
Also take note on listed company share buy back rules, and do not be a goon to queue high beyond the company buying limit price as they can only buy within 5% of the last 5 days average. As I believe a lot do not know this so re emphasize the rule.
1. on-market purchases should not exceed 5% above he average closing market prices of the share over the last five market days;
2. details of purchases to be released to the SGX-ST, if non-market purchases, by 9am on the next market day, or, if an off-market acquisition, by 9am on the second market day after the close of acceptance.
The gist of this article is there are a lot to learn just on fundamental and making money from corporate announcement/action. Is up to oneself to master and find your niche. Just like those 金庸Jin Yong martial art novel, I love them since young as different people can reach different standard with the same 武林秘籍martial art manual. Just like Stockcham stock trading book, is should be a good buy if you master it fully and reach 顶峰. But if you are lousy and do not bother to think and anyalze, any 武林秘籍 or good sharing/education posts will also turn to thrash and not worth anything as you cannot make money from it. How high the level and how good you can reach depend on how much you can make use of it and understand it. You no need the most powerful 武林秘籍 like 九阳神功 to make money as even you have that in your hand but always stuck at level 1 is pointless. Is better to keep things simple and learn simple and take a 武林秘籍 that is easy to learn like 太极拳. For new investors please learn basic like 扎马步and make sure you are good before proceeding further, it mirrors to those who learn what is stock, what is dividend, how to trade. Make sure you are good at basics before learning further. I hate it when people do not learn how to walk want to learn how to fly 一步登天. If is so easy then everyone no need to work. There are genius who can skip a lot of steps and learn fast, but there are not many 张无忌 in this world. I am not a genius so I can learn through the hard way. That is why from this crowd sharing platform, we can see same information being shared or learnt, like Warren Buffett value investing methodology, but end result differ because some apply it well while others did not apply it well or make mistake. Hope this weekend sharing is good and have a good coming weekend ahead all. For further thinking, evaluation and discussion.
If you are good even simple trading and investing methodology that you apply can yield you consistent return or result. If you are no good, go learn contra or complicated trading methodology will only end up in tears from my experience.