BioExx Specialty Proteins Ltd BIXZF

The January Effect strategy

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Below are some excerpts from an article that could have an effect on BXI.

"The January Effect strategy (buy small caps December 31st and sell January 31st) is based upon small companies outperforming in the month of January because of tax loss selling in December. The premise of this strategy is that investors tend to sell their small caps in December in order to generate losses and offset any capital gains that were created during the year. Investors are more likely to sell their small companies that are trading at a loss, rather than their large companies because they typically see their large companies as long-term holdings. The net result is that small company stocks get beaten down in price and typically represent good value for an astute investor."

"The Small Cap Effect is not only driven by tax loss selling, but also by agency risk for institutional money managers. These money managers are a self preserving group that do not want to take excessive risks and put their jobs in jeopardy. Since most fundamental style money managers do not beat the index, often their goal is to outperform the market early in the year, capture the returns and then “closet index” (create a portfolio that is similar to the benchmark index) for the rest of the year knowing that their results will look good. One method of getting ahead of the market is to invest in small caps early in the year, generate extra gains and then coast for the rest of the year. Money managers using this strategy often have no choice but to start buying into the small cap sector in December because of the size of their portfolio."