Results Reporting Period - any chance for quick money?

For most companies listed on Bursa, their financial year end is 31 Dec. Hence their first quarter Q1 results will be for Jan – Mar and under Bursa’s reporting requirements, results for this period must be announced within 2 months from last date of the reporting period, ie on or before 31 May.

Many short term traders/investors would like to predict the results of their target companies and hopefully to make some quick return from the trading. Many would look at signs from technical chart, any indication price is moving upward, any dealings by directors, any research house with forecast numbers ( hopefully the actual numbers to be reported is exactly the same as done by one  analyst before and ended up with investigations on how he can predict the results so accurately!!).

The issue I would like to highlight here are the guidelines by Bursa Malaysia on dealings by insiders during close period ( 14.04 & 14.05 below). To me, the rules are meant to minimise the unfair advantage obtained by insiders but it cannot eliminate it. Firstly, I personally feel that to proof a person is in possession of price sensitive information is very difficult, so generally the CEO, CFO and Executive Directors are the ones expected to have these information, any other people though may have it but not easy to prove they have it. Some companies do not even announce dealings by their management staff (they conveniently assume directors are the only principal officers). Secondly, for “insiders”, they do not have to wait till close period and yet still able to have good estimates of the results basing on business activities and regular internal sales update.   

 

14.04	​Possession of price-sensitive information
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An affected person must not deal in the listed securities of his own listed issuer or of other listed issuers as long as he is in possession of price-sensitive information relating to such listed securities.
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14.05	General restriction on dealings
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An affected person who is not in possession of price-sensitive information relating to listed securities may engage in dealings with such listed securities during a closed period provided that he complies with the procedures set out in paragraph 14.08 below.

 

Despite all that, there are still opportunities to make quick money as our prediction is either on par, below or above expectation. So, it is betting 1 out of 3 scenarios – still have 33% chance. However, as small retail investors, just be extra cautious when trying to make quick gain on trading in the reporting period as our predictions can’t beat the insiders.

I personally do not sell or buy in large volume during this period and would rather wait till the results are out. Yes, if the results are way above/below the investing community’s expectation, the price fluctuation can be significant depending what was the general expectation. I would then make the decision accordingly only if it is drastic, otherwise I would continue to hold as I have a longer horizon (at least 1 year horizon) when I decide to buy a stock. However, it is a busy period for me as I need to read and update my own analysis whether I need to action accordingly.   

Let’s see if the Q4 results of Panamy is good, any major dividend surprise or any other surprises as the share price has been climbing the last few days. All the best to us - fellow shareholders of Panamy. For me , I am looking forward to a better dividend pay out as Panamy is keeping too much cash and just put in deposit with related companies, I would prefer the company to return more to us for further investment.