September Seasonality — Seasonality — GCC Market Analytics
September Seasonality | GCC Market Analytics

Sunday, 29 August 2010

September Seasonality

September's just around the corner so I thought I'd analyse the historical performance of the GCC markets during this month.

For international equity markets September has been the weakest month of the year.  On average, since 1950, the S&P 500 Index has lost about 1% during September.  I wanted to see if this effect was the same for the GCC equity markets.

The chart below shows the average daily percentage change for each GCC market during each calendar month.

There are a couple of things of note.  Firstly, aside from January, the first half of the year is typically the best period for GCC equity markets.  The strongest months are February, March, April and August.

Secondly, the worst performing months, by some distance, are October and November. That's a big tendency to overcome for anyone who's advocating a year end rally.

As far as September is concerned, however, there isn't much to note apart from the strong performance of the Dubai market during this month.  On the whole, though, September has tended to be a mixed month for GCC equities.  The good news is that the data above doesn't seem to correspond with how international equity markets tend to perform during this month. Phew!


P.S. As with the previous Ramadan Effect post I have to point out that we're dealing with a very small data set for this analysis.  My data only goes back as far as 2004 for GCC equity markets so there have only been six or seven prior instances of each calendar month. It's hard to draw any concrete conclusions from such a small data set.