Primary tabs

Turning La Niña from investment bane to boon

Michelle Zhu Published on Tue, Aug 23, 2016 / 12:55 PM GMT+8

A-

A+

SINGAPORE (Aug 23): Understanding La Niña weather patterns would greatly benefit investors in discovering emerging opportunities and ideas, says Deutsche Bank.

“Historical evidence suggests that investors can be slow to price in weather patterns until things are fairly far along,” says Deutsche’s research team in a recent report. One key reason could be that most people simply do not understand the underlying weather drivers, it adds.

A La Niña phase is marked by unusually strong trade winds that give rise to exceptionally powerful monsoons that may bring floods to low-lying areas – as opposed to El Niño, where monsoons fail or are much lighter than normal such that Southeast Asia will tend to experience drought. The phenomenon involving both phases is known as the El Niño Southern Oscillation (ENSO) cycle, and usually recurs every two to seven years.