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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Happy New Year of the Horse, especially to all the traders in Hong Kong returning to their desks today.
As people around the world celebrate the lunar new year, Hong Kong-based investment bank CLSA published its annual feng shui guide to help investors navigate the market — a witchcraft that many sell-side research analysts claimed to have mastered. (You can find some previous FT coverage here and here.)
And… it’s looking good. CLSA’s fortune tellers predict that the city’s benchmark Hang Seng Index will jump steadily over the next 12 months “with fiery energy” “like a galloping horse” and finish the year nearly 20 per cent higher (high-res here):
It might not all be clear galloping, however, with the first quarter looking particularly tricky:
Noxious spirits are likely to stir up trouble in the early part of the year. We see rain and pestilence in the spring; those on high ground will fare better than lowlanders. For this reason, our Rooster is likely to stumble in the first month before recovering and waddling ahead in early summer. Those planning on a fine harvest this year may be better off planting their seeds later than usual, through the spring and into summer.
Still, it’s a more bullish take than Wall Street banks such as Morgan Stanley, which expects the index to rise about 10 per cent in 2026 in its base-case scenario, thanks to increased interest in Chinese tech stocks from foreign investors. (Note: There is no apple-to-apple comparison, given that Wall Street is pretty wedded to the Gregorian calendar.)
Who should we trust? If past performance is indicative of future results, CLSA’s feng shui experts actually beat MS’s analysts in the year of the Snake, aka 2025. MS called for a slight drop for the Hang Seng index due to concerns over US-China tension after Trump won the presidential election. (They did not know about the TACO trade, obviously.)
CLSA, meanwhile, correctly predicted that the Hang Seng Index would climb more than 30 per cent — although the dip in early April was steeper than expected due to Donald Trump’s Liberation Day tariffs (high-res image here):
So, does this mean someone has finally figured out a reliable way to do year-ahead forecasts? Possibly. CLSA’s feng shui masters also delivered decent predictions during the last Horse year, back in 2014 — but less so in 2002.
If you are willing to be guided by geomancy then here’s what you should do this year, according to CLSA’s five-element analysis: buy wood-related industries such as furniture, plants and medicines, and sell water-related sectors including beverages, toys and fishing.
While the bank weighed in on politicians’ fortune in the past based on their Chinese zodiacs, it did not single out anyone this year. It does however provide cohort recommendations grouped by zodiac sign, so we looked into how the world’s most important leaders may fare.
Here’s the advice for Donald Trump, a fire dog born in 1946:
Mark your territory by all means but go lightly on the home front. The cosmos is offering a good year, concentrate on small improvements and let it have its way with you.
(Possibly bad news for Greenland?)
And for Xi Jinping, a water snake born in 1953.
Your jaw can be dislocated in order to swallow enormous prey, yet the numinous turtle will refuse digestion. Choose carefully and this will be a fine year.
Hopefully we can achieve peace at home and abroad if both leaders take the advice to heart.
CLSA, which has released the feng shui guide every year since 1992, reiterated that the report is not a research product but a well-loved tradition for the firm to offer light-hearted market outlook. But they still hint at some mystical power behind the divination, naming its research analysts as “sorcerers” in the report.
At the very least, we think it is a more enjoyable read than many year-ahead outlooks.
Further reading:
— Financial Groundhog Day came late this year
