Low trading volume amid reporting season

THE trading fell for the second straight week with only three companies that recorded five purchases worth S$306,000 versus one firm with three disposals worth S$1.07 million. The buy figures were sharply down from the previous week's eight companies, 21 purchases and S$4.64 million. The sales, on the other hand, were down from the previous week's two firms, seven disposals and S$8.53 million.

Aside from directors, the buyback activity plunged last week with only two firms that posted four repurchases worth S$3.4 million. The figures were sharply down from the previous week's five companies, 17 trades and S$11 million.

The low director and buyback activity in the past two weeks are not surprising due to the upcoming reporting season. Directors are bullish heading into the reporting season based on buy/sell ratios for the number of transactions from August 2014 to January this year. Buy/sell ratios are calculated by dividing the number of purchases with sales. Buyers have outnumbered sellers in terms of number of transactions in the past six months with the buy/sell ratios ranging from 6.4 to 18.1, with a median of 12.3. These are the highest ratios in the same six-month period since 2011 and 2008. Investors should note that the market ros…