CLSA nails custard to the wall for tongue-in-cheek report

Whither the slither? This and other compelling questions for investors in the Year of the Snake are raised and answered in CLSA's 19th Fung Shui Index.

Strange but true, it is CLSA's most eagerly anticipated report and is therefore unveiled to clients at special lunches and dinners in London, New York, Singapore and Kuala Lumpur. While it doesn't come with a formal disclaimer, CLSA is at pains to stress that it is supposed to be a tongue-in-cheek look at the equity market. Nevertheless clients appear to take it pretty seriously, which makes you wonder about them. However, such is the fame of this product that we gather requests come from as far afield as Estonia.

Previous snake years have not been good for markets with the Hang Seng Index closing significantly higher in only one of the last five. Years of the snake we are told are marked by major transformations and change and sometimes great upheaval: Pearl Harbour (1941), Twin Towers (2001), Tiananmen (1989), Fall of the Wall (1989), Depression (1929), recessions (1953, 2001), revolutions (1917, 1989), and major conflicts (1941, 1965). However, CLSA feels there are good fung shui reasons for believing this year should be better behaved since all five of the basic elements or energies are present in the fortune charts.

Investors may be relieved to learn that the annual Flying Star energies return to their home sectors after nine years. As for the HSI, the Year of the Snake should turn in a good first half on the back of a resources led-rally between May and July, with the second half punctuated by massive volatility, but ending with a decent rise that takes the HSI back above its starting point.

The best performing sectors are forecast to be those associated with metal: banking, broking, financial stocks, along with those associated with water: gaming and logistics. As for individuals, the year should be a good one for roosters, cows and dogs, and less good for pigs, tigers, sheep and snakes. As for advice on how to balance your portfolio, CLSA warns using fung shui to balance a portfolio is like trying to nail custard to the wall.