China’s Shanghai Stock Exchange (SSE), along with its flankers, the CSI 300, ChiNext, and STAR Market, will all be closed on Friday 24th through Thursday 30th. The reason; to celebrate the most important time in the Lunar calendar, it’s beginning.
2020’s Chinese New Year (CNY) will mark the start of the year of the rat, quick-witted and resourceful according to the zodiac horoscope! The rat says this year will be strong, prosperous, and lucky.
The Big Day in China 🇨🇳
A growing middle class will break the bank this year with e-commerce giant Alibaba, rigging up lanterns for decoration and playing with puppet dragons for fun. Traditional little red envelopes full of cash gifts will lead to a spike in consumer spending. However, the real watchword during this 15-day holiday; food!
Hundreds of millions of hot-pots will bubble with consumers opting for rarer delicacies and cuisines. Bottles of spicy Chinese red wine can run and will run into the thousands of yen (hundreds of dollars), with native names like Sun Art and Yonghui there to profit.
Costco also opened a Chinese hypermarket in August last year, but the big box retailer’s Sino-retail revolution went a little too well. Police were called in to herd mobs of Chinese shoppers scrambling for its meat counter, and eventually, it had to tweet the stark message, “please don’t come!”
Clearly, the prize is enormous for any Western brand that can contest in the battleground region successfully. However, the Chinese New Year is an ethnic celebration, not a national one. It’s not all about China!
The Big Day in HK 🇭🇰
Protestors have been giving colorful and vibrant CNY fair stalls a makeover. On top of selling flowers, dried fruits, and herbs, souvenirs emblazoned with political slogans are being sold. The establishment is trying to crack down on these independent fairs, but it’s a war of wills at the moment. Hongkongers are determined to proudly celebrate the Lunar New Year with one-sixth of the world’s population, but on their terms.
Hong Kong was recently given a ratings relegation by Moody’s, implying greater risk in investing there. Its economy has contracted 1.3% for the year, a recession is in full motion, and real estate, retail, travel, and leisure industries have been hit the hardest. Does Hong Kong deserve its downgrade?
The Big Day in Singapore 🇸🇬
A haven for expat investors, Singapore is not your typical Southeast Asian city-state. Principles of free trade have transformed Singapore from a poverty-stricken swampland to a bustling SuperCity. It’s been voted the best place to live and work by expats, and it’s home to the Asian headquarters of countless big western brands.
Investors can soak up the Singaporean festive atmosphere in street bizarres set to boost the local economy and STI 30 exchange. The Invstr community’s favorite stocks out there include Singapore Airlines, SingTel, and the United Overseas Bank!
Coronavirus Strikes 💉
If there’s anything capable of killing the mood this Lunar New Year, it’s the outbreak of the killer coronavirus. Having spread without a cure from Wuhan, China, to the rest of Asia, millions will stay home this January 25th and duck the ‘Chunyun’ travel rush. Given a three-billion-trip–strong human migration going on in China right now as families reunite, the outbreak is likely to get worse before it gets better.
Pharmaceutical companies are scrambling to offer the first antidote to contain the common-cold like lung infection. Healthcare stocks on the ChiNext shot up as the media jumped on the story, just like ten years ago, when around three hundred were killed by a temporary rogue virus in China.
So far, Chinese markets have only benefited from the coronavirus. However, greed could quickly turn into fear based on how wildly the bug spreads through the Chinese New Year. We’ll keep you clued in!
Investing in China 💸
Government influence on Chinese corporations, corruption, and foreign currency risk have scared many investors off in the past. However, it’s not often that two billion people celebrate the same holiday at once by purchasing many of the same foods.
Investors keen to diversify into China, an American hedge and the second-largest economy in the world, might use the Chinese New Year as a sharp entry point. What are your thoughts?
