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Tuesday, February 3, 2009

For investors, docile Year of the Ox expected

Excerpt Herald Tribune

Stock investors reeling from the market mayhem of last year may take some solace from practitioners of the ancient Chinese art of feng shui, who predict a calmer, if subdued, performance in the coming Year of the Ox, which starts Monday.

"This Year of the Ox is an 'earth' year, when people will take a breather and reflect on what they should do after a turbulent 2008," said a Hong Kong feng shui master, Raymond Lo.

Practitioners of feng shui maintain that the universe is made up of five elements - earth, water, fire, wood and metal - that define the collective mood in our environment.

Earth is the calmest of the elements and this year is a "yin earth" year as well as an ox year, symbolizing a more feminine energy, Lo said.

Chinese emperors put great faith in advice from feng shui masters, as do many business tycoons and politicians in Chinese societies today.

Apartment blocks, office buildings and furniture are often positioned according to feng shui principles to generate wealth. The Hong Kong headquarters of the banking giant HSBC was built in accordance with feng shui guidelines and Hong Kong Disneyland changed the angle of its main entrance after consulting a feng shui expert.

Feng shui has made its way into corporate research as well. A report this month by a Japanese research company, Daiwa Institute, warned that ox years are usually disastrous for stocks and that the Japanese Nikkei stock index had fallen by an average of 11.4 percent in each of the past five years of the ox.

The Year of the Ox will be the most peaceful year globally since 2000, Lo said, but stock investors do not need to rush into the market yet.

"2009 will be a 'pure earth' year, which means fire will be missing, so there will not be a lot of drive to push up the stock market," Lo said. The economic climate will still be tough and though stock markets might rise in the first half of this year, gains could peter out in the second half, Lo said.

"The market should still be quite low in the second half, and that would be a good time to get in ahead of a recovery in 2010," the Year of the Tiger, he said.

"Yin earth" years are supposed to symbolize harmony and a move to a new order. The last "yin earth" year of the ox, in 1949, saw the birth of NATO and the People's Republic of China.

Vincent Koh of the Singapore Feng Shui Center also predicted that financial markets would be subdued.

"Don't pick high-risk assets this year," Koh said. "Be patient and don't expect high returns."

The global economy could start to pick up in the second half of 2009, said Koh, who sees busy merger and acquisition activity but adds that banks will continue to be reluctant to lend.

Feng shui masters have a mixed record when it comes to market predictions. Lo forecast a stock market correction a year ago but also advised investors to put their money into property.

Charlie Chao, a leading feng shui expert in the Philippines, was quoted in a CLSA research note a year ago as warning of a possible global economic crisis in 2008.

But he also forecast a better performance for the Philippine stock market. That did not happen. Manila stocks slumped 48 percent last year, reversing a 21 percent gain in 2007.

As fewer people buy property or start businesses during the economic downturn, Michael Teo, a feng shui master at I-Ching Fengshui in recession-hit Singapore, is seeing a drop in business.

However, sales of auspicious feng shui jade carvings, which cost $2,000 to $3,000 and are said to bring wealth, are being snapped up every day, he says.

Koh compares feng shui to a reliable weather forecast, saying it can help us anticipate changes in our environment.

"We cannot stop the rain, but knowing it is going to fall, we can prevent ourselves from getting drenched," he says.

But getting wet may be a minor concern in the Year of the Ox. While financial markets should be calmer, Koh foresees the spread of disease and a spate of natural disasters, particularly in the northern hemisphere, with landslides, floods and earthquakes in store.

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