The Year of the Tiger is almost over, with those betting on the equity market experiencing a good deal of shocks and surprises.

The ride may not be as bumpy in the forthcoming Year of the Metal Rabbit, but investment bank CLSA's 17th Feng Shui Index (FSI) predicts that the only thing predictable about the year ahead is that it is, well, unpredictable. So like the ubiquitous rabbit, expect the market to bounce up and down this year, occasionally taking a breather to munch the odd carrot or two.

According to the seers at CLSA, the confrontation between the metallic Heavenly Stem and woody Earthly Branch will continue in the year ahead, setting the stage for a volatile equity market in 2011. But as the rabbit hops up and down Hong Kong's greener spaces, so too the equity market will take an almighty hop sometime this year, according to the report. It also expects the HSI to close the year higher. According to CLSA's prediction, the HSI will reach 29,000 points in 2011.

"It will be a year 'up'," said Phillip Chow, the CLSA analyst and "divinator" of the latest FSI.

But it will also be a year when "wealth will be hard earned", Chow added.

For the market, there will be a "dull" and "slow" start to 2011, Chow said, with the Tiger reluctant to leave and the Rabbit hesitant about showing up.

Market softness will remain in place until April and May when the market will experience a slight rebound. The real rally will be seen after the summer as the second half of the year will see a sustained market rally despite the rabbit hopping into a ditch in September, the report predicts.

"We expect a market rally in the second half of 2011," said Francis Cheung, head of China-Hong Kong strategy at CLSA. But it will be a "zigzag market", said Chow.

Emma An

(HK Edition 01/20/2011 page2)