HONG KONG -- This city is one of the world's most advanced financial hubs. Nevertheless, feng shui -- the Chinese philosophical system based on the elements of fire, water, wood, metal and earth -- has deep roots in the region's culture. Market participants are no exception.
After the midautumn festival is over in October each year, feng shui masters can be seen on the covers of books and magazines for the next year at convenience stores and bookstores all over Hong Kong. This is about six months before the first day of spring in feng shui, which is based on the lunar calendar.
These books tell fortunes by year of birth, lucky items, directions and lucky days based on feng shui. Many people in Hong Kong buy crystal balls, bracelets, cell-phone charms and other accessories based on these books at the beginning of the new year.
Hong Kongers, especially the elderly, are proud of the fact that "Hong Kong has enjoyed prosperity ahead of mainland China because Hong Kong is situated in a lucky place according to feng shui," said a Hong Kong woman in her 70s.
According to the theory, Hong Kong is the final destination of the dragon power coming from the Kunlun Mountain in China. The power is concentrated in the Lion Rock in central Kowloon Peninsula, spreading several vines of power in the area. Many structures in Hong Kong were built based on feng shui to capitalize on the power of the area.
Market players, too
Many stock market players also use feng shui. Shum Chun-ying, CEO of Sincere Securities in Hong Kong, said he turns to feng shui when he is hesitating on what to do. Patrick Shum Hing-hung, investment director at Tengard Fund Management, said he believes in feng shui, although there are no economic grounds for this belief.
Ma Jun-cheng, a well-known feng shui master in Hong Kong, earned an MBA degree from a university in Australia. He became a feng shui master specializing in investment by using his expertise in feng shui. He is known as the "feng shui master with an MBA."
Shum of Sincere Securities predicted based on feng shui that the Shanghai Composite Index would top the 5,000 mark by summer, but would later fall. The index posted its year-to-date high of 5,166 on June 12, 2015, and tumbled amid the so-called "China shock" in August, almost exactly as predicted. Above all, it must have taken a lot of courage for him to predict that the index would rise to the 5,000 a year ago, when the index had hovered around the 3,000 mark.
Back in 2014, Shum of Tengard Fund Management expected the global economy would be sluggish for the next three years, and the economies in the U.S. and elsewhere would not recover before 2016, the Year of the Monkey. His predictions were near the mark, given the current global situation.
'Fire' sector recommended
Feng shui master Ma predicts that with 2016 being the Year of Monkey, fire will be destructive to metal, based on the five elements. So stock markets could be volatile.
However, because fire also symbolizes bright light and rising, major stock indexes in developed markets will end higher than at the beginning of the year based on the lunar calendar, Ma said.
Asked about the prospects for China's slowing economy, Ma said that capital will flow into the south and west in China in 2016, with the slowing of the economy unchanged. Based on the suggestion that the restaurant business will attract people, however, the driver of economic growth will shift further to the service sector, Ma said.
Incidentally, said Ma, the recommended sector according to feng shui in the Year of the Monkey is Internet stocks, which are related to "fire," in the form of electricity.