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Hong Kong waits for dragon's roar

(Shanghai Daily)

09:17, January 19, 2012

HONG Kong investors preparing to welcome the Year of the Dragon should look forward to a strong stock market rally much like the mythological creature rising from the depths, a brokerage said yesterday in lighthearted predictions.

CLSA Asia-Pacific Markets released its highly anticipated annual feng shui index ahead of the Lunar New Year.

The firm's index predicts that Hong Kong's Hang Seng Index will have a lackluster performance in the first half of the year, with the "dragon lingering below the water," said Philip Chow, a CLSA "sorcerer" who helped write the report and is an equities analyst in his day job.

Feng shui is the Chinese practice of arranging objects and choosing dates to improve luck. While the predictions are lighthearted, many people in the southern Chinese financial center follow feng shui principles in the belief they will boost their wealth.

The dragon is the only creature in the Chinese zodiac that doesn't exist in real life and, according to Chinese tradition, they only appear just before important events such as a transition of power, Chow said.

For investors, that means "when the dragon does actually show up is when overall desperation in the markets is at an extreme," said Chow. In August, "we would see the dragon accumulate enough energy to soar from the depths."

Invoking a Chinese proverb that says you can never see a dragon's head and tail at the same time, Chow said 2012 will have "very fat moneymaking opportunities but the time frame is very short, so we expect most of the gains to be over by December."

The brokerage predicted in 2011 - the Year of the Rabbit - that markets would proceed cautiously in a zigzag fashion. Chow said that came true.

"When frightened the rabbit overreacts and goes back into its hole," Chow said. "Unfortunately we were right on that part. It got scared by the eurozone crisis."

Many businesses in Hong Kong adhere to feng shui principles. Typical practices include placing two stone lions at a building's entrance to defend the wealth in the building. Fountains are popular because they are believed to bring the energy of water, an ancient symbol of abundance.

Numbers also play an important role, with auspicious dates chosen for meetings and announcements.

They even play a role in company stock codes, with many Hong Kong companies incorporating the number eight, which in Chinese sounds similar to the word for prosperity.

The report also offers predictions for politicians and celebrities.

For instance, German Chancellor Angela Merkel, who was born in the Year of the Horse, will have a "shocker of a year" as she helps battle the European debt crisis, the report said.

Now in its 18th year, CLSA's index has become a fixture on Hong Kong's investment calendar. The authors consulted 10 feng shui experts for the report.

But Chow said the predictions shouldn't be taken too seriously.

"This is just sort of tongue-in-cheek," he said. "For fun."

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