Turmoil will make monkeys out of un

Turmoil will make monkeys out of unwise investors this year
, NQN staff writer

HONG KONG -- With the Year of the Monkey set to roil Chinese markets further, by popular wisdom, investors will need a healthy dose of the wit and caution the year's namesake animal is known for.

The Chinese zodiac represented by 12 animals is a common theme when talking about the economy and markets in greater China. Hong Kong brokerage CLSA mentioned the Year of the Fire Monkey -- the new year's sign in the 60-year cycle -- in an invitation Friday to next week's annual presentation of market predictions. Monkey imagery and the Chinese character representing the animal were a motif in signage and handouts at a Jan. 14 news conference by British bank HSBC on its outlook for the year.

The Japanese adage that monkey years bring market tumult is found in China as well, a Chinese analyst working in Shanghai said. But the Chinese New Year does not arrive until Feb. 8. This month's turmoil could instead be chalked up to the influence of the waning Year of the Sheep, which is said to require patience.

The Chinese edition of Hong Kong-based PineBridge Investments' 2016 outlook, released Thursday, said investors will need to be smart enough to outwit a monkey in the new year. It used the animal -- commonly portrayed as clever, mischievous and alert -- as a metaphor for the jittery, unpredictable market, presenting it as an obstacle to overcome. A careless investing style will do little good amid high volatility and an economic slowdown, PineBridge said, contending that investors will need to be shrewd enough to pick promising sectors and stocks.

The asset management company named four investment themes for Asian stocks, centering on China: domestic demand, renewable energy, the Internet of Things, and efficiency and technological innovation in the manufacturing sector.

Domestic-demand stocks were selected to reflect a regional shift from external to internal demand as a growth driver. This trend will boost stocks related to consumer spending and Asian investment, according to portfolio manager Wilfred Son Keng Po. A focus on internal demand will help protect a growing Asia against outside volatility, he said.

PineBridge sees innovation in solar, wind and hydroelectric power generation gaining in importance if the rise of Asia's middle class lifts energy demand. Internet of Things technology is spreading in not only consumer electronics, but also manufacturing. Getting an early start on leading-edge technology will let Asian companies play a key role in these areas. And if Asian businesses improve production efficiency, they will be relied on more by global companies maintaining and expanding supply networks, PineBridge said.

The winners in the long term will be those who can understand every aspect of the companies they invest in, rather than those who discover the next macroeconomic trends, Son Keng Po said. The broad stock decline offers an opportunity to snap up quality shares at a good price, a tactic that famed U.S. value investor Warren Buffett has used to great effect. The market's ups and downs are more than just sound and fury -- they are a chance to learn from the monkey's prudence.