Feng Shui Masters Say Bet on Drugmakers in the Year of The Dog

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(Bloomberg) -- Pharmaceutical shares could be a real shot in the arm for investors during the Year of the Dog if the stock market predictions of feng shui forecasters are to be believed. However, banks and the auto and machinery sectors are much less auspicious, they say.

In the runup to every Chinese New Year, CLSA Ltd. issues a light-hearted report giving forecasts for Hong Kong’s Hang Seng Index based on the ancient system governing energy flows.

This time the Feng Shui Index predictions come after a year that saw the city’s equity market record a 36 percent rally, making it one of the world’s best performers.

Feng Shui Masters Say Bet on Drugmakers in the Year of The Dog

Despite heavy losses in the market in the past 10 days or so, authors Sally Chan and Alec So -- A.K.A. the Sorcerer’s Apprentice and the Wand Bearer -- see the Hang Seng getting off to a strong start in the Year of the Dog, which begins on Feb. 16. Healthcare, consumer stocks and the paper industry should excel, they say.

Feb. 28 is forecast to be particularly lucky -- good news for those who follow China’s economic indicators as the purchasing managers index is due that day.

Casino and transportation stocks will fare poorly in the first three months before storming back in the final quarter, they say, helping the market to gather speed and end the year on a high note.

The months between will see the “fire force” dominant, the pair add, melting gold and prosperity as the dog days of summer set in. There will be a few bright spots such as tech, telcos, utilities and construction, though property and renewables will lag behind.

The authors couldn’t help crowing about their forecasts for the outgoing Year of the Rooster, saying they were “fairly accurate” as they correctly predicted a slow start for the Hang Seng and a climb from April through August. However, they said the Hang Seng outperformed their predictions over the summer, “perching higher than we’d thought possible.”

As for their Year of the Dog predictions, it seems the feng shui pair could be barking up the wrong tree as CLSA admits that investors may do better following its analysts’ calls.

Kung Hei Fat Choi!

©2018 Bloomberg L.P.

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