Year of the Rabbit: Hang Seng’s struggle for 30,000, Taiwan’s black swan alert and the wait for belated payoff, feng shui experts warn
- Astrologers are generally not too optimistic about stock upside, similar to tongue-in-cheek prognosis by CLSA analysts
- The market is likely to improve when 2024 approaches, or even later when the next fire cycle begins in 2025
For many investors, the just-concluded Year of the Tiger will not be missed. The Hang Seng Index slipped 9.3 per cent based on the Chinese zodiac calendar, following a 22 per cent loss in the preceding Year of the Ox. Chinese stocks represented by the broadest MSCI China Index also stumbled for a second year.
Blame it on Beijing’s zero-Covid policy, the Federal Reserve’s most-aggressive policy tightening in decades, and the US-China geopolitical fallout. As these triggers either end or diminish, will the water Rabbit bring joy and profits?
Most China strategists at Wall Street firms are unambiguously bullish on Chinese equities, even after an almost 50 per cent surge from end-October in the Hang Seng Index. Some investors, however, have indicated they are wary of a potential 5 to 10 per cent pullback, before loading up more.
The Rabbit’s presence will cause Hong Kong’s market to hop all over the place, with little traction, according to the tongue-in-cheek analysis by CLSA. After a strong start to the new year, the market may be exhausted before March. Pitfalls loom in August and October and a surge in November would not hold, it predicts.
What are the astrologers saying? Three feng shui masters in Hong Kong use the Chinese traditional art of geomancy to foretell what the capital markets hold in the Year of the Rabbit. A caveat is needed: these predictions are for reference only. Investors should make their decisions based on fundamental analysis.