gantt chart

Topics: Stock market, Fundamental analysis, Stock Pages: 4 (1128 words) Published: October 22, 2013
The phenomena of calendar effects in stock markets seem to be a center of curiosity for many researchers across the world. Following many studies about the significance of calendar anomalies, testing the presence of Monday effect and January effect appears to be an area of interest. The aim of this study is to discuss about calendar anomalies and its significance. It should be noted that the study will focus mainly on Monday effect and January effect on the stock returns of companies listed on SEM-7. The research proposal will consist mainly of the literature review part and the methodology part.


Calendar anomalies are effects which include apparently different behavior of stock markets on different days of the week, month and year. Calendar effect may also be defined as a collection of theories that state that certain days or month are subject to above price changes in stock market and can therefore represent good or bad times to invest. Brooks and Persand (2001) defined calendar effects as the tendency of stock returns “to display systematic patterns at certain times of the day, week, month or year ”.

As mentioned above, the study will discuss mainly on Monday effect and January effect.

The day of the week effect also called Monday effect indicates that the average daily return of the market is not the same for all days of the week as we would expect on basis of Efficient Market theory. Monday effect is a theory which states that return of the last trading day is the highest and return on the first trading day is the lowest across the days of the week. January effect is a phenomenon whereby stocks claim higher rates of returns during January compared to any other month. Smaller stocks tend to beat bigger stocks during this period. The January effect also known as “year-end effect” indicates rise in price during the period starting on the last day of December and ending...
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