Turning challenges into opportunities

IN a few days, we will usher in the Lunar New Year under the sixth animal zodiac, the Snake.

This year is the 4723 under the Chinese calendar and a Yin year.

Just like any other year, the Year of the Snake will have a significant influence not only on those who are born under the same animal zodiac, but also on the other eleven Chinese zodiac animal signs.

In addition, there are five elements of the Chinese zodiac derived from the Five Elements Theory and they are Fire, Water, Earth, Wood and Metal, with this year again the Wood year.

The next question on everyone’s mind would be, “What will be the outlook for the Year of the Wood Snake”?

According to the website www.thechinesezodiac.org, “The Year of the Snake is all about finding balance, slowing down and trusting the process.

After the Dragon’s whirlwind, we can finally take a breath and focus on what matters.

“The Snake’s energy is here to guide us toward deeper transformation, personal growth and steady progress. It’s not about rushing, it’s about evolving, reflecting and building.”

The website further adds that with the elements in place, aligned with the energies of Wood, it might feel like everything hidden, unsaid, or unresolved is now surfacing.

It won’t all be smooth sailing. The year 2025 is about pushing boundaries and learning to navigate new challenges.

The last Wood Snake year was in the 1965 and the next one is 60 years ahead, in 2085.

The Year of the Wood Snake will be a time of tremendous opportunity, renewal and potential.

Using the Snake’s wisdom and intuition, coupled with the inspirational and flexible nature of the Wood element, we can anticipate a year full of both challenges and opportunities.

As a snake can shed its skin and emerge with a new appearance, we too are advised to get rid of our old habits and adopt new ones.

Surely the year of the Snake 2025 can be an excellent time to start new projects, explore new opportunities, or even make significant changes in your life.

Positive momentum, economically

Economic-wise, in the past, the Malaysian economy has seen respectable performances in Snake years.

In 2013, the last Year of the Snake, the economy expanded by 4.7%, while in the year 2001, the economy expanded by a mere 0.5%. The year 1989 was very strong as the economy expanded by 9.1% then.

Hence, the past three Snake years have been relatively strong as far as the economy is concerned.

This year, the economic momentum is likely to be the average of the last three snake years, where the economy is expected to expand by 4.8%.

Mixed market history

The Year of the Snake has not been a mixed year as far as the market is concerned, measured by the performance of the FBM KLCI.

The bourse saw a strong performance in 1989 when the FBM KLCI jumped 42.5% or 168.04 points (pts) to close at 562.98 pts.

The following Year of the Snake was a mixed year and the market closed relatively flat year-on-year (y-o-y).

However, the last Year of the Snake was again a robust year as the FBM KLCI regained its upward momentum and closed strongly at 1,804.03 pts, up 180.23 pts or 11.1%.

Hence, other than a flat performance in 2001, the other two Snake years, i.e. in 1989 and 2013, saw the FBM KLCI rising on both occasions with double-digit gains.

What’s in store for 2025?

The local bourse has seen a poor start to the Gregorian calendar, but most global markets’ performance in the tail end of the Year of the Dragon has seen a rather mixed to stronger performance, led by a solid Euro Stoxx 50 Index, up by 6.6% since the start of the year.

Among Asian bourses, Korea emerged as the best-performing market, rising 4.8%, while the local bourse and the Stock Exchange of Thailand (SET) Index are both down 4% year-to-date.

The FBM KLCI started the Year of the Dragon (2024) at 1,512 pts and was last seen at 1,577 pts as of Thursday’s close – three trading days before the Year of the Snake starts.

During the Chinese calendar year, the FBM KLCI rose to a high of 1,678.80 pts by the end of August 2024, but is now 4.3% higher y-o-y just three days before the end of the Lunar calendar.

The next question is how will the market perform in the Year of the Snake and where would the market be when we usher in the Year of the Horse on Feb 17, 2026?

Index-wise, the FBM KLCI is seen to have a fair value of about 1,790 pts for 2025, driven by an expected 8.9% growth in earnings.

The market is poised to register strong momentum this year, backed by relatively upbeat growth in the economy as foreign direct investment and domestic spending are expected to continue.

The wild card is the new US administration under President Donald Trump as the world awaits his executive orders declaring higher tariffs for imports, as well as his public policies on migrant labour issues, tax cuts and spending.

Prior to Trump’s inauguration, President Joe Biden issued a new framework for the exporting of the advanced computer chips used to develop artificial intelligence (AI), meant to address US national security concerns while noting the economic interests of producers and other countries.

However, this has raised concerns among chip makers over export restrictions that would affect 120 countries, including Malaysia.

Biden’s executive order is not in effect yet as there is a 120-day comment period, which is hoped will be used by impacting nations to lobby the Trump to drop the framework.

The issuance of this order effectively dented the data centre theme that the market has been riding on, going into the new year.

Since his appointment, President Trump has already unwound Biden’s 2023 order regulating AI, which required companies to share safety test results and other critical information with the government.

It is hoped that the new administration will also reverse the latest order issued by Biden: Although Trump is very much into Making America Great Again, the new AI framework is simply not feasible.

In conclusion, while The Year of the Snake can be positive for markets, based on relatively strong underlying economic and earnings growth, there will be challenges and opportunities as we adopt a new world order over the next years under President Trump.