My mother hates snakes. She refuses to open a National Geographic magazine because one time she turned its pages, was unexpectedly confronted by a large picture of a coiled serpent and nearly had a heart attack.
She’s not alone in her fear, which is why a lot of people in this part of the world – the Chinese world – are starting to worry. Although the New Year is always a wonderful celebration, this year we augur in the Year of the Snake. And no matter how cutely artisans draw them, those cherub reptiles gracing the lobbies of office and apartment buildings are still slippery, sibilant, scary snakes.
Credit Lyonnais Securities Asia (CLSA) is here to help put your fears at rest. Yesterday its Wicked Sorcerer of the East, Kenny Lau – his day job is research – attired in full feng shui master regalia, presented the CLSA Fung Shui Index, which is actually based on astrological predictions of four local fung shui masters. Amusingly, in the past this index has proven a more accurate indicator of where the Hang Seng Index goes than the forecasts by some of CLSA’s own analysts. As a caveat, Lau notes these predictions get “more attention than they should” and sometimes conflict with CLSA’s official house views.
Last year, however, sticking with the voodoo would have been a good idea. The Fung Shui Index for the Year of the Dragon tracked the HSI closely until about October, when it predicted a bout of good fung shui when in fact the HSI tanked. Going over his notes from last year to see what went wrong, Lau found a warning from one master that early bad mojo from the Snake would filter into the end of the year.
So what’s in store for us? Lau says Snake years are often marked by war, social unrest and transfers of power. That has led the masters to predict a major political shift in Hong Kong or China in August, although Lau says no one knows what it will be; that a mainland telecom giant will enter the Hong Kong telecom market; and that Japan will get a new prime minister this year. I was rather hoping these guys would predict financial journalists would become beloved and rich, but no such luck.
This year will also see strong Gold and Water elements, and CLSA has extrapolated that to favouring banks and transport. Well-managed banks are Lau’s favourite sector, given US-driven interest rate cuts and accelerating loan growth. Hang Seng and Citic Ka Wah are two bank stars. It’s a ho hum time for Earth elements, so property won’t be a performer, and a rotten time for Fire, so avoid those sparky IT and electronics companies – Taiwan’s in for a rough year and punters will get creamed.
As for the HSI itself, trading will be extremely choppy and marked by bad feng shui for nearly 10 months, but in October, as we lead into the fast-paced Year of the Horse, it will shoot up. The good feeling will be reinforced by the high-profile wedding of a young tycoon. Happy ending and hugs all around.
