Feng Shui Index predicts bouncy ride in year of the tiger

Metal and wood û an incompatible pair of elements could lead to restless activity on the trading floor, says CLSA in its tongue-in-cheek Feng Shui Index report.

2010 is the year of tiger, the third of the 12 Chinese zodiac signs. The tiger is energetic, optimistic, impulsive and restless; and the same characteristics will apply to Hong Kong stocks this year, with the benchmark Hang Seng Index (HSI) acting much like a bouncy big cat, CLSA foretold in its annual Feng Shui-inspired predictions for the local stockmarket.

Starting from February 14, the Chinese New Year day, the vigorous but hot-tempered tiger will take charge of a lunar year that will bring market volatility in the first half and staggering rallies during the rest of the year, according to a tongue-in-cheek Feng Shui Index report by the brokerage.

Apart from the tiger influence, the volatile market is also triggered by the conflict of two incompatible Feng Shui elements this year -- metal (although the Chinese prefer to call it gold, which has more auspicious implications) and wood.

Wood has a harsh relationship with gold in the Feng Shui destructive cycle, in which water extinguishes fire, fire dissolves metal, metal cuts wood, wood consumes earth, and earth absorbs water. Any of the incompatible pairs could lead to a restless trading floor, CLSA indicates.

Share prices in Hong Kong will tumble until early June, with the stock index reaching its 2010 low in mid- to late-May, which is said to be the most inauspicious period under the charge of the wild tiger.

So, what's the Feng Shui advice for investors? There's an old Chinese saying that translates roughly as, "once on a tiger's back, it's hard to get off", but, adds CLSA, if you can hang on, it's certainly the safest place to be.

The monthly market movements projected by CLSA's Feng Shui index mask the roller-coaster rides that it expects will occur week-to-week, and even day-to-day.

Any Feng Shui tips? Investors should be careful on May 7, 16 and 25 and on June 3, CLSA foretold. Overall, it says, there will be two key upswings in the Hang Seng index, around the start of June and in September.

However, if 2010 will be a bouncy tiger year, why isn't it bouncy throughout the year? And if the tiger's vigour cushions a market rally, then how come the Hong Kong stock index reached an historical high above 30,000 points in 2007 -- the year of pig -- a zodiac sign representing calm and slowness. And what will happen in 2015 --- the year of sheep -- a sign which stands for over-passive and pessimistic?

Also, this year's prophecy is amazingly similar to the firm's Feng Shui Index last year, which was the year of ox or bull. In the beginning of 2009, CLSA suggested that the Hang Seng index would start the year on a volatile note, fall during the summer, before climbing gradually towards the end of the year.

The volatile-to-rally format of Hong Kong stocks is shaped partly by the mainland economy, which in turn is tuned by government policies. And China's policy announcements tend to come around March every year; before then the market is full of speculation. And since it usually takes around three months for lower-level lawmakers and investors to digest the government's economic blueprint after the plans are revealed, the first half of the year is normally marked by uncertainty while the second half shows clear direction.

Each year, Feng Shui masters will say it is going to be a lucky year, but investors have to make the luck themselves.

Photo by Bangkok Post.

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