[KUALA LUMPUR] TO beat the market, investors should embrace the qualities of the snake in what is its year from Feb 10. Learn its serpentine nature and "bountiful opportunities" await even as we hiss goodbye to the dragon year and glide into the snake year, investment bank Hwang-DBS Vickers advised.
In its annual market strategy (albeit a fun-filled one) for the Chinese New Year, analyst Goh Yin Foo predicts higher highs and lower lows as the Malaysian equities market slithers to a projected low of 1,500 before staging a recovery to the 1,750 level.
But investors have to watch the swings in the market and time their strikes. They should also know when to hibernate or lie low.
"Be instinctive and contemplative when making investment decisions. Keep your ears to the ground, like how the snake picks up the vibes of an approaching prey or danger . . . embrace its ability to read complex situations quickly and then strike like lightning to make the kill," Mr Goh suggested.
In line with the snake's mercurial nature, Malaysian equities could see ups and downs as markets will have to contend with a general election this year, the prospect of which has already swayed the stock market as many investors have taken profit and are sitting on the sidelines.
Indeed in its strategy report, Maybank-IB said most of its clients were already neutral on Malaysian equities but "would be constructive once there is clarity on the political front".
The investment bank expects further weakening ahead of the polls - widely forecast to be held by the end of April - but a rebound in the second half.
For most political analysts, the outcome appears too close to call. (Then again, an economist at a government-linked bank who recently said the opposition coalition Pakatan Rakyat could possibly edge past the ruling Barisan Nasional was suspended by his employer).
Interestingly, even geomancy masters have indicated "no conclusive view in terms of election forecasts", Hwang-DBS Vickers observed.
However, the soothsayers agree that the dominant elements of water and fire will bring prosperity to sectors related to earth, metal and water. Hence industries likely to flourish include property, construction, oil and gas, banking and finance, and shipping.
At the current market level of 1,613, Hwang-DBS agrees that there are more downside risks than upside potential. (Its year-end target is 1,690 points based on a one-year forward price-earnings ratio of 14x.)
But from a bottom up perspective, it has picked eight counters with "favourable celestial readings", yet backed by solid fundamentals. They are Maybank, RHB Capital, SapuraKencana, IJM Corp, SP Setia, WCT, Pos Malaysia and KLCC Property.
Incidentally, Maybank and KLCC Property also made the dragon year list; the former is up 17 per cent and the latter an even more flattering 93 per cent.
Who knows, those born in the year of the rat, ox, horse, rooster and dog - animals in the Chinese zodiac that are in harmony with the snake - will have just as much luck in their stock picks this year.