Chinese New Year is just around the corner and ahead of next month's celebrations, financial company CLSA says stocks in Hong Kong will likely be in for a rocky Year of the Pig. But take heart, it says, the year could ultimately be profitable for those investing there.
The investment group released its annual CLSA Feng Shui Index this week, which uses Chinese geomancy to try and predict the market.
CLSA describes the exercise as "tongue in cheek," though it illustrates the power that traditional ideas — such as ensuring good fortune and avoiding disaster — hold in China and many parts of Asia.
Feng shui, which literally means "wind" and "water" in Chinese, is an ancient method that seeks to maximize luck and fortune based on the analysis of a complex system of factors.
There are 12 Chinese zodiac animals that represent each lunar year. It is currently the Year of the Dog. And when more than a billion people in China, and millions more around the world, celebrate the Chinese New Year which starts on Feb. 5, they will be ushering in the Year of the Pig.
"According to our predictions the Hang Seng Index will likely have a volatile year ahead in the Year of the Pig, " Sally Chan, who covers internet stocks for CLSA, told CNBC on Friday when explaining about the report.
Expect turnaround
Chan said the conflicting elements of fire and water will be prominent in the upcoming year, and that will be why equity markets are set to be tumultuous. But "fire-related industries" such as the internet, technology, telecoms and utilities could outperform, she said.
Despite the expected market swings, those who stay the course stand a good chance of coming out ahead — if history is to be trusted, CLSA said in the report.
In the previous four pig years, dating back to 1971, the local Hang Seng finished higher, and CLSA expects the same result this time around.
In 2018, the Hang Seng slumped 13.6 percent. But the Hong Kong index has gained 4.9 percent so far in 2019 through Thursday's close.
As for personal fortune, those born in the soon-to-conclude Year of the Dog — such as U.S. President Donald Trump — may be shadowed by some residual "negative energy," Chan said.
"For dogs, they could be facing some unexpected events during the Year of the Pig," she said, before offering a bit of advice on how to get through it.
"Just chill," she said, suggesting spa treatment as a relaxing option.
