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5 Shares for Chinese New Year

The Chinese New Year is an important traditional Chinese holiday that’s celebrated on the first day of the year according to the Chinese calendar.

Traditionally, the festival is marked as a time to honor various deities as well as family-ancestors. There are other cultural norms associated with the festival, which includes visiting family and friends as well as the act of the older generation giving out red packets (“Ang Baos”) containing money to the younger generation as a form of blessing.

All told, the Chinese New Year is considered a major holiday for the Chinese and a good time to catch up with long-lost friends and distant relatives (which I do annually).

As we gallop into the Year of the Horse, let’s take a look at a few themes which are closely related to the celebration of Chinese New Year and which can also be interestingly related to the stock market itself!

Chinese New Year Goodies & Decorations

No one can celebrate Chinese New Year without all the delicious snacks and dried barbecue pork (“Bak kwa”). Many people will flock to Chinatown as it turns into a bustling area for the sale of many goodies and decorations that are needed as part of the preparations for the festival.

On the other hand, busy professionals may not be able to fork out the time and effort to roam around Chinatown in search of bargains. Instead, they may look at somewhere more convenient, such as the GIANT supermarkets that are owned by Dairy Farm International Holdings (SGX: D01) or the eponymous Sheng Siong supermarkets that are run by Sheng Siong (SGX: OV8).

In periods like these, it can be quite a sight to see throngs of customers queuing up and embracing the festive shopping mood.

Gambling

Make a guess on what relatives and friends do when they get together? Yeah, you should have got it – Gambling. Apart from the New Year goodies, nothing excites people more than gambling and it can perhaps be considered part and parcel of the festivities in Singapore.

Though gambling among friends and relatives usually involves token sums of money as it’s the camaraderie that matters more, gambling can be big business. Just ask Genting Singapore (SGX: G13) and Genting Hong Kong  (SGX: S21), which are two examples of casino plays listed in Singapore. The former runs Resorts World Sentosa which has its own casino, while the latter operates cruise ships of which casino-gambling is a big part of the onboard entertainment activities.

Catering                                                       

Reunion dinners are an important part of the Chinese New Year tradition whereby family members get together to have a nice meal as part of the celebrations.In the past, reunion dinners are usually prepared by the elder family members, but there seems to be a recent trend toward a more hands-off approach as more families make use of catering services. In any case, caterers are also often employed by offices around Singapore to offer buffet spreads as treats for employees during this festive period.

Neo Group (SGX: 5UJ) is a caterer that has demonstrated its ability to provide quick catering services in Singapore and had even set a local record for most number of orders served by serving 1,005 orders on the first day of lunar new year in 2013.

Foolish Bottom Line

Some of the shares mentioned above might benefit from the Lunar New Year festival. But even if the seasonality effect is likely to contribute to the firm’s bottom-line, investors should look at at such shares with a more holistic view.

Stock markets around the world, including here in Singapore, having been selling-off recently and now’s a good time to remind ourselves to not get too caught-up with declining prices and instead, focus on the long-term fundamentals that underlie our investments. Keep in mind that price and value will converge over the long run and buying and holding undervalued shares would give us good odds of succeeding in the stock market.

On behalf of my colleagues at The Motley Fool Singapore, I wish everyone a Happy Lunar New Year and a prosperous year ahead!