It's the Lunar New Year weekend, which finds China and its neighbors winding down on work and gearing up for travel. The Year of the Rabbit begins on Sunday, Jan. 22, so we'll see weak trading in East Asia next week if it occurs at all.
The Taiwan markets already have been closed for two days. Hong Kong will take the first three trading days of next week off while markets in mainland China and Taiwan will be closed all week.
We're saying "so long" to the Year of the Tiger, which was a fierce one indeed. The Lunar New Year is a kind of Thanksgiving and Christmas wrapped all in one in greater China and is celebrated as Tet in Vietnam and as Seollal in Korea. While it's generically known as "Chinese New Year," that's not entirely true.
South Korean markets are closed on Monday and Tuesday, with Vietnam's market holiday running through Wednesday.
It is known as the Spring Festival in China, normally the coldest point of the year and ushering in spring. While there may not be a public holiday in other nations, there's a sizable Chinese population all across Southeast Asia, often dominating the business scene, so you'll see festive red lanterns and smiling bunnies all across the region.
The Asia-focused brokerage CLSA releases an annual Lunar New Year forecast, the CLSA Feng Shui Index, mainly for Hong Kong. They say it's tongue in cheek and to contact their analysts if you want some grounded insights, but it's always an interesting read.
Each year is also characterized by one of the five elements: wood, fire, earth, metal and water. This will be a Water Rabbit year, something that only comes around every 60 years.
CLSA notes that the Rabbit is "gentle, quick and responsible," technically the fourth animal in the 12-year cycle of the Chinese horoscope. "Together with yin water, this combination bodes well for a calmer 2023 compared to last year's tumultuous experience," CLSA writes. Its "destiny chart" or bazi "advises us to step out of our comfort zone but remain mindful of perils afoot. After all, a rabbit's foot is lucky for everyone but the fluffy woodland creature."
The lack of metal in this year's forecast is unfortunate. No coin. While there will be "substantial movement" for the Hang Seng index in particular, it will gain little traction, CLSA writes. After two stumbles, it should rally in November and lead for a comfortable end to the year.
Fire-related industries should have a prosperous year, CLSA states. That means oil and gas, fashion and tech. Wood prospects are "fairly good" for healthcare, education and agriculture. It will be a mediocre year for earth-related industries, with property, construction, travel, hotels and transport washed away by all that water. Metal-linked financials and products such as batteries will face pressure.
North and South are the best directions, wherever you are. East, where the Tai Sui grand duke will sit, should be avoided, as should the West, where the malevolent Year Breaker star and the Three Killings will reside.
This is a Lunar New Year unlike any other in mainland China. For the first time in three years, there are no restrictions on travel, meaning what's often characterized as the largest human migration - from the wealthy east coast cities and provinces to the hinterlands and ancestral home towns - can take place. And with China so recently abandoning its zero-Covid strictures, the Covid-19 virus will come with it.
It is with extremely wishful thinking that the National Health Commission states, as it did on Thursday, that China has passed the peak period for patients attending fever clinics and emergency rooms and who are in critical condition. An official told a news conference the number of patients in critical condition in hospital was 40% lower as of Jan, 17 than it was on Jan. 5.
The big cities may be beyond the worst of their outbreaks. But rural areas, with basic or no health infrastructure, have surely not yet seen full penetration of the virus. And rural villages tend to be home to an older population, with young workers taking off for jobs in cities, meaning older rural residents will be most at risk if they contract an infection.
China suddenly said last weekend that almost 60,000 people have died with Covid in hospitals between Dec. 8 and Jan, 12. It previously acknowledged deaths totaling no more than one-tenth of that tally. Even the 60,000 figure is sure to be a dramatic undercounting -- doctors say they are discouraged from mentioning Covid on death certificates, officials are desperate to avoid admitting to local Covid deaths, and relatives are often pressured to accept another cause of death if they are to get their relative's remains in good time for cremation without an autopsy.
The British health data company Airfinity predicts that 36,000 people may die from Covid in China every day over the Lunar New Year holiday. All the holiday movement may provoke 62 million Covid cases, Airfinity predicts. Treatable patients may die in overcrowded hospitals due to the inability to deliver care, the company's analytics direct, Matt Linley, said. It previously forecasted that 1 million deaths may result from Covid in China.
Whatever figures we get from official sources in China can be dramatically discounted. Economists and public health experts will need to pore over activity data, "excess deaths" and eventually census data to generate private estimates of what's going on.
Almost half of Chinese cities likely saw a peak in Covid infections from Dec. 10-31, according to research from infectious disease modeler Lai Shengjie, shared with Nature magazine. Another 45% of cities should have been seeing a peak in the first half of January. More than half the population of cities such as Shanghai and Beijing has likely caught Covid, while a Henan Province official said almost 90% of people in China's third-largest province by population had had the virus.
However, this painful period will no doubt lead to China's final emergency from the Covid cloud. Nomura estimates that Chinese households have built up C¥17.5 trillion (US$2.6 trillion) in "excess" household savings deposits over the three pandemic years.
Some of that will be released during the festivities over the Lunar New Year period. The travel period, the Chunyun spring festival rush, winds up for the week or two prior to the actual new year and can run for 40 days or so, taking us well into February this year. Don't expect much response if you have clients, customers or suppliers in this part of the world, at least until the end of next week, when life in a post-Covid East Asia may start getting back to normal