Hong Kong's Market Faces Year of the Bull

HONG KONG -- Speculators beware! The Chinese Year of the Bull may live up to its name as far as the Hong Kong stock market goes, but other markets might behave more like mad cows.


That's the word according to the readings of Chinese geomancers, or Feng Shui masters in Hong Kong, tapped by Credit Lyonnais Securities Asia, or CLSA, for its eagerly awaited 1997 Feng Shui report.


The index had humble beginnings as a Chinese New Year card for CLSA clients in the Year of the Monkey in 1992.


Embarrassingly for many a well-paid stocks analyst who called the market wrong that year, the Feng Shui experts correctly anticipated all seven major turning points in Hong Kong's blue chip indicator, the Hang Seng index.


The rest, as they say, is history.


"We would not, of course, recommend any investor take the CLSA Feng Shiu Index with anything more than the moo which it was intended," the firm warned sternly, with one eye firmly to the less-than-ghostly world of securities regulators.


"Especially those large prudent institutions responsible for running funds on behalf of the bereaved and parentless."


But for the curious and the desperate, here's what the Year of the Bull -- the second animal in the 12-animal Chinese calendar -- has in store, according to the geomancers.


The 4,000-year-old practice of Feng Shui, literally wind and water, gauges the harmony or lack of it between the five traditional elements -- metal, water, fire, wood and earth.


In the Year of the Bull, there will be a confluence of opposing elements, water and fire, suggesting a volatile time ahead, particularly going into the third quarter -- although peace and harmony will prevail by the end of the year, the CLSA report concludes.


"Long term investors will do well in the Year of the Bull, but traders or speculators may get gored as world markets charge around like a herd of mad cows."


Tigers, Rabbits, Horse and Dragons will have the best fortune while Dogs, Roosters, Goats, Snakes and Bulls should avoid the market altogether. If they must invest, they should focus only on blue chips for the long-term.


As for the British colony of Hong Kong, where the Year of the Bull ushers in the most momentous change in more than 150 years with the handover to China in mid-1997 -- the outlook for the market is quite bright.


As for the handover itself, the CLSA Feng Shui index confidently predicts a smooth transition at midnight on June 30 -- with one exception.


That exception is Hong Kong's future leader, Tung Chee-hwa, a former shipping magnate now turned Hong Kong Chief Executive-designate.


"Coming from the comparative freedom of running one of the world's largest shipping companies, recently-elected CEO Tung will not enjoy 1997, with the world's scrutiny suddenly falling upon his shoulders," the Feng Shui experts predicted.


And Tung's sign? He was born in 1937, which makes him a Bull.