CHINA: Markets will be shaky and investors should pay attention to transport, gaming, tourism, construction and property in the Year of the Dragon according to a Feng Shui Index issued by a brokerage in Hong Kong

Record ID: 838589

  • Title: CHINA: Markets will be shaky and investors should pay attention to transport, gaming, tourism, construction and property in the Year of the Dragon according to a Feng Shui Index issued by a brokerage in Hong Kong
  • Date: 21st January 2012
  • Summary: HONG KONG, CHINA (FILE) (REUTERS) VARIOUS OF CONSTRUCTION SITE VARIOUS OF PROPERTY ADS HONG KONG SKYLINE
  • Embargoed: 5th February 2012 12:00
  • Keywords:
  • Location: China, Hong Kong, China
  • City:
  • Country: Hong Kong
  • Topics: Business,Arts / Culture / Entertainment / Showbiz,Finance,Quirky
  • Reuters ID: LVAE3I4SEIKXHH6UQJ4PBGB4RSGN
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  • Story Text: In the year of the Black Water Dragon, investors have been warned that they could get torched again if they leap back into the market too soon.
    But the outlook is expected to brighten considerably later in the year, according to Hong Kong brokerage CLSA which publishes a forecast for the Hang Seng index based on feng shui principles.
    Feng shui is the ancient Chinese art, or science, based on 'Qi', the natural flow of energy.
    The Lunar New Year starts on January 23 in 2012, with the calendar switching over from the Year of the Rabbit to the Year of the Dragon.
    CLSA analysts, dressed in bright, Mandarin-collared traditional clothes, on Wednesday (January 18) presented their tongue-in-cheek stab at predicting what every feng shui-savvy investor needs to know - the outlook for stocks and local property prices in these volatile times.
    Their report, brandishing a colourful melange of cartoons, graphs and caricatures, features on the glossy front cover a menacing black dragon sporting red and yellow swimming trunks and a matching snorkel about to take a dip in the ocean.
    If the rest of the report is to be believed, that snorkel is not coming off any time soon in the Year of the Dragon that begins on Monday (January 23).
    The Hang Seng is set to remain in a funk through the first-half of the year, according to Philip Chow, who in his day job covers the transportation sector for CLSA, but on Wednesday donned the mantle of feng shui master.
    For the Year of the Rabbit, the Hang Seng Index is poised to lose nearly 18 percent.
    For the Year of the Dragon, whichin early February 2013, there's unlikely to be much respite until the market's levels of desperation peak between May and July, said Chow, adding that then the picture will brighten.
    "One thing to remember is that the dragon is a very fast-moving animal, i.e. is also very aggressive and very energetic. So what it means is that you can potentially make a lot of money in the Year of the Dragon but the window for action is actually very short. So we expect the market to surge, to be very violent. It will last for four months and by December all the gains will have been done so that's when you, sort of, put your hands up and just exit," said Chow.
    Last year's feng shui forecast scored two "spot-on" versus five "dead wrong" predictions, according to CLSA's own assessment, as a second-half slump across global financial markets appeared to be at odds with the gods.
    Hong Kong feng shui master, Raymond Lo, said the timing of any rally in the market was more likely to be in the fire seasons of spring and autumn, but agreed the outlook for the Year of the Dragon was not great for investors.
    "So actually the five elements system is working on the stock market. Quite obvious, the Chinese associate five elements with our feelings and our mood and the stock market is the collective mood of the people. For example, fire element is associated with happiness so therefore the fire year usually stock market comes up. And water is the opposite. Water is fear, people are afraid. Therefore, people lose confidence and they don't invest," said Lo, speaking from his office and classroom overlooking Victoria Harbour.
    In terms of sector picks, CLSA said feng shui dictates that water-related sectors such as shippers and water utilities are in for a good year.
    Investors placing bets on the energy sector, in particular oil and gas, are likely to end the year disappointed.
    Another top pick for the year is the Macau gaming sector.
    But investors were warned that their odds would be as good, or as bad, as they are in one of Macau's glitzy casinos.
    "And water would generally refer to transportation, so airlines, shipping gaming. Gaming is not so much gambling in itself but more lodging and hotel-related travelling. So Macau stocks will also be interesting. It won't be initially clear but the eight Chinese characters of the New Year but if you also look at the monthly elements rotations, from the second quarter onwards you will see more metal. More metal and earth sectors also benefit. So sectors like cement, property, construction will be interesting," said Chow.
    In terms of the zodiac signs, a 'fab' year lies ahead for those born in the years of the Rat, Tiger, Rabbit, Monkey and the Rooster; while Cows and Dogs may need to take a little extra care.
    One unique characteristic that differentiates the dragon from other animals featured in the Chinese zodiac is that no one, with due apologies to Chinese emperors, St. George and the like, has ever seen a dragon.
    In Chinese mythology, the appearance of a dragon marks a transition of power, or a turning point.
    In tune with that prediction, Vice-President Xi Jinping is widely expected to take over as general secretary of the Chinese Communist Party, a step towards eventual appointment as president in the world's second-largest economy.
    Its light-hearted look at Hong Kong's financial markets, now in its 18th year, was hosted at the Shanghai-esque China Club, in the old Bank of China headquarters in the city.
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