2016 is the year of the monkey in the Chinese zodiac, and investors are being warned to brace for volatility before a recovery into year-end.
That’s the prediction of CLSA’s annual Feng Shui index, which has taken a tongue-in-cheek look at what the year of the fire monkey means for markets and a handful of well-known global personalities, writes Peter Wells in Hong Hong.
CLSA describes the Chinese monkey as an “ambivalent figure” who is “loved for his human-like antics and disliked for his lack of social grace and unpredictability.”
The Hong Kong-based brokerage focuses its attention on the Hang Seng and, having consulted the horoscopes, expects the index to endure a volatile first half and a mid-year slump before staging a recovery.
[W]e expect to see some fast movement in the first few months of the year, coming close to lunchtime (mid-year), we expect our monkey to stop for a bite, dropping out of the canopy for a chance to pick up the fruit that may have slipped through his furry paws. The second half is perhaps not as stellar as those first few months, but progress continues.
The Hang Seng finished higher in all of the most recent monkey years – 1968, 1980, 1992 and 2004 – but the gains were wafer-thin in 2004. CLSA notes that last year, the year of the goat, it managed to predict the Hang Seng’s trajectory with “eerie facility”.
Metals (not just silver and gold plays, but the financials, gaming, transport and machinery sectors) and water-related industries are expected to rally in the first half of this year.
Potentially forecasting the bursting of the tech bubble, CLSA expects things to turn upside down for oil & gas, utilities, technology, telecoms and the internet “as the Monkey runs amok in the final quarter.” However, judging by the deep slide in oil prices so far this year, the shakeout may have arrived early.
Those born in the Chinese years of the Ox and the Snake should have a good year, but things are likely to be tough for Dragons and Roosters.
For fire monkeys like Tsai Ing-wen, Taiwan’s new president, the stars should align for finance, work and travel.
Weighing in on the US presidential race, CLSA says this could be a “mongrel” of a year for Donald Trump, a fire dog, who is warned to watch his spending this year.
“If Trump is running all the way, we can expect him to be watching the rivers of money flowing out with the tide, before perhaps coming back in with a full-moon high tide,” CLSA says.
But Mr Trump’s bigger problem may be secretary of state Hilary Clinton because, according to CLSA, “this is the year of the golden tongue for the Fire Pig” – her Chinese zodiac. The one caveat, the brokerage says, is the the presidential aspirant needs to avoid faux pas.
“It’s a time to make sure that family don’t make slip-ups, with Bill’s activities resembling a naughty monkey rampaging through the foliage throwing banana skins out behind him, Hillary will need to have a leash on that baboon and his florid mating signs.”
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