2007- Year of the Pig

Expect More Good News in the Year of the Pig

According to the Chinese zodiac calendar, February 18 marks the start of the Year of the Pig.

To some investors, the pig may seem like a fat and lazy animal, implying a listless outlook for stock markets this year. Afterall, stock markets have done exceptionally well in the last few years, and so a breather this year seems to be in order.

However fengshui expert, Master Ong Thiam Peng of I-Ching Geomancy Centre, thinks it¡¦s unlikely that stock markets will consolidate this year. In fact he¡¦s quite bullish about the outlook for markets.

Master Ong said that in the Chinese zodiac, the pig is deemed to be blessed with luck and wealth. What¡¦s more, this year¡¦s pig is no ordinary pig, as an analysis of the phonetic element indicates that it is boar - an aggressive animal that¡¦s likely to continue charging ahead.

However Master Ong said that the boar is also an animal that can wreak havoc. As such, investors ought to be careful with their investments and brace themselves for volatility and even sharp pullbacks, even though stock markets are likely to end the year on a positive note. 

Predictions Have Materialised

Master Ong is no ordinary fengshui expert. He is well regarded and has a good track record in making predictions about economies and stock markets.  

At the onset of last year, he had predicted continued buoyancy for Asia Pacific stock markets in the Year of the Dog, and this prediction was borne out.

He had also anticipated political problems in Thailand, which he said would cast a pall on the country¡¦s stock market - this materialised after the country¡¦s Prime Minister was overthrown in a bloodless coup last September.

On the U.S. economy, Master Ong said that it was unlikely to see a significant slowdown even though many analysts were expecting growth to moderate significantly in the second half of last year. Once again, the U.S. economy bucked expectations and did better-than-expected last year.

Progressive and Positive Year

Looking into the year ahead, Master Ong reckons that Year of the Pig should translate to continued economic and stock market prosperity, although the gains this year may not be as strong as last year.

Master Ong highlighted that the I-Ching ¡V China¡¦s ancient book of wisdom, the embodiment of Taoist philosophy ¡V indicates that the year ahead is likely to be a progressive and positive one and the boar will have the strength and capacity to ¡§cross mountains¡¨.

Such a boar, said Master Ong, is as strong as bull, which supports the prognosis that stock market bulls will continue to rein this year. However he cautioned that even as the boar heads for higher ground, it will have to navigate through mountainous terrain, meaning that the road ahead is likely to be a bumpy one for investors.

ST Index Has Room to Head Higher

Although the Singapore stock market has done very well in the past eight months, with the ST Index up by some 40 per cent, Master Ong reckons that it has more room to head higher.

He said based on his own calculations, the ST Index should be at about 3,680 if the market had not been shaken by the threat of war and SARS. Throw in the speculative element and the market¡¦s investment value, and he reckons that surpassing the 4,000 mark, a level that¡¦s been bandied around by some forecasters, may be possible.

Property Market Should Continue Doing Well

The Singapore stock market aside, Master Ong is also positive on the outlook for the local property market, especially the high-end segment.

He said that the positive prognosis for the local economy and stock market augurs well for property prices here. Also, when we compare property prices here to other leading cities, it¡¦s quite evident that there is room for further improvement.

However, Master Ong said that most of the price gains are likely to take place in the high-end segment of the property market, which will benefit well-heeled investors and foreigners with deep pockets.

Looking beyond Singapore¡¦s Shores

Looking beyond Singapore¡¦s shores, Master Ong is of the view that event risk is likely to be less of an issue this year, although news headlines continue to focus on the risk of bird flu outbreaks and a possible war between the U.S. and Iran. Master Ong said that after several years of uncertainties, the Year of Pig should herald in not only more prosperity, but also greater peace.

In the U.S. for instance, the fact that the Democrats have an upper hand in Congress means that it is unlikely that a Republican President like Bush will have a free rein to initiate a war against Iran as he did with Iraq three year ago.

However, Master Ong cautioned that the same cannot be said of Israel, which may launch a pre-emptive strike against Iran if it is threatened, even if it fails to get U.S. backing.

Finally on currency markets, Master Ong foresees the U.S. dollar weakening this year. He highlighted that Middle Eastern countries now seem keener to invest their petrodollars into emerging equity markets like Asia, which have the potential to offer attractive returns. They are also spending more to develop their domestic economies as they attempt to reduce their dependence on oil. Consequently, Middle Eastern countries look set to hold less greenback and U.S. financial products, and this will be one factor weighing on the U.S. dollar in the coming year.

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