Stomping good times

Famines, wars and stock crashes aside, the year of the sheep has also produced stellar market gains

The Year of the Sheep, the eighth in the cycle of lunar new years, is around the corner. The sheep has a reputation as a thoughtful and gentle character but it has not always lived up to this characterization.

From famines and crashes in 1931 to the launch of the A-share market on the Chinese mainland in 2003, past sheep years have led to changes in the course of history and deeply impacted markets for both good and bad.

2003

This was an important year for the Shanghai Stock Exchange, which launched the A-share market for foreign investors. Turnover on the exchange rose 71 percent over the previous year, and 88.3 trillion yuan ($14 trillion at current exchange rates) worth of shares changed hands.

By the end of the year, the SSE 180 Index rose 12 percent and the Shanghai Composite 11 percent. The market in Shenzhen did not do as well, dropping almost 3 percent.

The year saw the beginning of serious e-commerce in China when Alibaba launched its e-commerce platform Taobao.

On the other hand, the sheep also brought with it the end of a technology bubble that had seen Internet stocks soar in Western markets.

An outbreak of severe acute respiratory syndrome started in Hong Kong and spread through Asia and much of the world.

The United States led an invasion of Iraq after having fought a war with the country in the previous year of the sheep. The end of this second Iraq War led to a stock market rally in the US.

1991

This year of the sheep - from Feb 15, 1991 to Feb 3, 1992 - was pivotal as it was widely seen as the beginning of the third industrial revolution and the beginning of the Information Era.

It was in this sheep year that the World Wide Web first entered the public consciousness. Not only did the Web lead to a revolution in people's lives, it also generated some serious gains in markets. Through 1991, the Nasdaq rose 65 percent.

The First Gulf War ended in the spring of this year. Iraq had invaded Kuwait in August 1990 and an international force led by the US fought from January 1991. The year also saw a number of countries separating from the Soviet Union and eventually ending the Cold War.

The year ushered with it the end of a recession in the US that had started in 1990.

1979

This sheep year was marked by the Islamic Revolution in Iran that ended a pro-Western regime and replaced it with the Islamic republic of today. That was a turning point for the oil market. Iran has the third-largest oil reserves in the world.

In the same year the average daily volume of trade on the New York stock exchange reached 32 million shares. The S&P 500 Index rose 12 percent and DJIA 4 percent during the year.

1967

Marking the humble beginnings of a regional grouping that is shaping itself into an economic powerhouse today, the Association of Southeast Asian Nations was founded in August this year of the sheep, which ran from Feb 9, 1967 to Jan 29, 1968. The ASEAN Economic Community is poised to launch in the year of the sheep 2015.

In February 1967, US forces began the largest offensive of the Vietnam War. Four months later, the conflict in the Middle East that became known as the Six-day War ended with Israel, supported by the US, defeating Egypt, Jordan and Syria.

The year 1967 was remarkable for Wall Street, with average daily trading volumes increasing from 8 million shares at the end of 1966 to 10 million shares in 1967, thanks to a business boom.

1955

It was during this year of the sheep - from Jan 24, 1955 to Feb 11, 1956 - that the former Soviet Union and seven East European countries signed the Warsaw Pact, and West Germany became a sovereign country.

Through the year, the S&P 500 rose 26 percent and the Dow Jones 21 percent. The middle of this year marked the end of a little-known but remarkable bull market in the US that had started in 1949 and saw the DJIA triple in a little more than seven years.

1943

The year of the sheep that ran from Feb 5, 1943 to Jan 24, 1944 brought with it the beginning of the end of World War II after the US got involved.

WWII, for all the tragedy and suffering that came with it, helped end the Great Depression. It also heralded a period of high inflation in the US, which forced the government to freeze prices, salaries and wages.

1931

Markets and economies suffered terribly as the Great Depression took hold in this sheep year that ran from Feb 17, 1931 to Feb 5, 1932.

The DJIA lost 89 percent of its value from 1929 through 1932. The period was marked by financial collapse, hunger and severe unemployment that would last until WWII at the end of the decade.

In the UK, a run on the British pound led to political and economic crisis in the same year that Mao Zedong proclaimed the Chinese Soviet Republic.

(China Daily Africa Weekly 02/20/2015 page16)