Feng shui masters and analysts find common theme in predicting stocks future

  • Business
  • Friday, 31 Jan 2014

PETALING JAYA: In trying to predict the confounding movement of stock prices, financial analysts and feng shui masters have found one common theme in their market prediction for the Lunar New Year.

Liquidity, they believe, will be a big issue this year.

“Asia is not immune to financial market volatility in the current environment of receding global liquidity and capital reversals as the US Federal Reserve starts to roll back its bond purchases,’’ CIMB Research’s economist Lee Heng Guie said.

He said healthy corporate balance sheet and a strong war chest of foreign reserves put Malaysia in a strong position to face the incoming market turbulance.

Equity markets around the world endured a torrid month in January, on worries that the US Federal Reserve’s continued tapering of its bond-buying programme would suck the liquidity out of emerging markets.

The FTSE Bursa Malaysia KL Composite Index tumbled as much as 5% in January to breach the psychological 1,800-point level for the first time since Nov 27. The index climbed 14.8 points yesterday to end the Year of the Snake at 1,804 points.

Bursa Malaysia will resume trading on Tuesday.

MIDF Research, in a report earlier this week, calculated that RM8.48bil worth of foreign funds had exited the local bourse in the past 16 weeks. Other regional markets experienced similar heavy outflows.

While fears of foreign funds flowing out of the market have knocked down stock prices around the world in recent weeks, cash rich domestic funds are mopping up the shares at lower levels, according to data from Bursa Malaysia.

“Potential downside would be limited to 1,750-1,700 points range,’’ MIDF’s head of equities Syed Mohammed Kifni said, adding that his year-end target for the FBM KLCI remained at 1,900 points.

“The year starts out slow. It looks bad initially but gets a lot better towards the second half, when the fire element of the Wood Horse becomes more dominant,” Mastery Academy founder Datuk Joey Yap said.

According to the ancient art of Chinese feng shui, the universe can be divided into five distinct elements – earth, fire, wood, water and metal. The Chinese zodiac consists of 12 animals that interact with the five elements.

The abundance of fire in the Wood Horse, according to Yap, would catalyse activities that could lead to technological innovation, scientific breakthrough and space discovery.

The key element of the Wood Horse – fire – represents sectors like oil and gas, plantations and the airline industry.

Yap is positive on Malaysia, saying that the country has the benefit of the peach blossoms, also known as the Red Matchmaker star.

“Malaysia is popular. People like us and we are especially of international interest this year! We will continue to attract international investors here,” said Yap.

He said growth in the West, represented by the metal element, would be superficial.

“Metal has no roots, so growth has no solid base. The European world, unfortunately, houses Star 7 this year. This is the star of disputes, hence indicating conflicts and finger-pointing,” said Yap.

China, on the other hand, represented by wood, will continue to be favourable.

On a more cautious note, Yap said the lack of the water element to douse the abundance of fire typically signifies either a disease or an epidemic.

The abundance of fire and metal also points to an explosive situation, or armed conflicts.

Meanwhile, CLSA, in its annual Feng Shui Index, which predominantly tracks the Hang Seng Index, sees the stock market performing better in the first half than the second half of the year.

CLSA sees the index peaking in July and then correcting sharply for the subsequent two months. It consolidates for the rest of the year before picking up in January 2015.

CLSA said the last time the Year of the Wood Horse came galloping along was back in 1954.

The most notable event then was the Dow Jones Index closing at its all-time high of 382.74 points on Nov 23, 1954, finally regaining levels seen before the Great Depression of 1929. On a year-on-year basis (Feb 4, 1954 to Feb 3, 1955), the Dow Jones finished off 117.44 points or 40.18%

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Business , Feng Shui , Horse , stocks


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