Hong Kong investors preparing to welcome the year of the dragon should look forward to a strong stock market rally much like the mythological creature rising from the depths, a brokerage said yesterday in a lighthearted astrological prediction.
CLSA Asia-Pacific Markets released its highly anticipated annual feng shui index yesterday ahead of the Lunar New Year.
The firm said its index predicts that Hong Kong’s benchmark Hang Seng Index will have a lackluster performance in the first half of the year, with the “dragon lingering below the water,” said Philip Chow (周子諾), a CLSA “sorcerer” who helped write the report and is an equities analyst in his day job.
The dragon is the only creature in the 12-animal Chinese zodiac that does not exist in real life and according to Chinese tradition they only appear right before important events, such as a transition of power, Chow said.
That means “when the dragon does actually show up is when overall desperation in the markets is at an extreme,” Chow said.
In August, “we see the dragon accumulating enough energy to soar from the depths,” he said.
Invoking a Chinese proverb that says you can never see a dragon’s head and tail at the same time, Chow said this year will have “very fat moneymaking opportunities, [but] the time frame is very short, so we expect most of the gains to be over by December.”
The brokerage predicted last year — the year of the rabbit — that markets would proceed cautiously in a zigzag fashion. Chow said that forecast came true.
“When frightened, the rabbit overreacts and goes back into its hole,” Chow said. “Unfortunately, we were right on that part. It got scared by the eurozone crisis.”
Along with predictions on the stock and property markets, the report also offers predictions for politicians and celebrities.
For instance, German Chancellor Angela Merkel, who was born in the year of the horse, will have a “shocker of a year” as she helps battle the European debt crisis, the report said.
Now in its 18th year, CLSA’s index has become a fixture on Hong Kong’s investment calendar. The authors consulted 10 feng shui experts for the report and attracted about 220 people to an investor luncheon for its release.
However, Chow said the predictions should not be taken too seriously.
“This is just sort of tongue-in-cheek,” he said. “For fun.”