Rally? Feng Shui Master talk

AS Chinese Zodiac thinkers would read it, over several months preceding the Year of the Rabbit, the global stock markets would be challenged by a severe crisis and forced to find a deep bottom before bouncing back.

Based on historical trends, they suggest that the arrival of the Rabbit year not only marks a more meaningful recovery period for the global economy, but also for equities in general. According to the Chinese lunar calendar, the 12-year cycle of the Rabbit will start on Feb 3, 2011.

Locally, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) has already breached its historical high, setting new records even before the official arrival of the Rabbit.

Fundamental factors do come into play: Asian economies are growing healthily, global commodity prices are moving up, and there is excessive liquidity flooding the regional markets.

In addition, expectations of a General Election being called soon are also contributing to the local stock market rally.

In the preceding pages, we had pooled the thoughts of analysts and economists on their take on the stock market outlook for the Year of the Rabbit. To add a dose of metaphysics for a different perspective, The StarBizWeek contacted three feng shui experts. Here are their take.

Grandmaster Yap Cheng Hai, the perpetual consultant of Malaysia Feng Shui Association:

I think the stock market is definitely going to perform very well this year.
Grandmaster Yap Cheng Hai ... ‘The stock market is definitely going to perform very well this year.’

Reason is simple: Many people these days are getting increasingly short of money because the rising inflation is fast depleting their net worth.

And what makes it worse is the slow increase, or even stagnancy (in some cases), of their salaries and wages that generally have not been able to keep pace with the continued rise of the general prices of goods and services in the country.

In that case, when people are short of money, what they like to do is gamble. And the stock market provides one of the best avenues for them to do just that in order to make that extra income or money to compensate for the loss of their wealth.

As for the choice of investments, I think blue chip and plantation stocks would do comparatively well. I base my argument on the fact that there has been an increasing trend of natural disasters in the world lately.

Natural disasters are contributing to the increase of commodity prices, and at the same time, causing food shortages in many parts of the world. These factors, in turn, will contribute to increase in food prices.

So, we will see, in particular, plantation stocks benefiting from the rise of commodity prices, industrial companies, especially those in the blue-chip category, benefiting from the rise in food prices.

Master Kenny Hoo, the founder and chief researcher of Good Feng Shui Geomantic Research:

I have themed this year as the year of “consolidation” for the local stock market, whereby we will see a lot of changes ups and downs happening.
Master Kenny Hoo ... ‘A year of consolidation for the local stock market.’

Companies that have not been doing so well during this recent cycle of bull-run will most likely continue to go downhill, and this could result in some merger and acquisition activities among those companies.

On the other hand, companies that have been doing well or just okay will most likely do much better this year.

I predicted earlier that 2010, the Year of the Tiger, would be an “awakening” year, in that the stock market would do extremely well, and we have seen that happened. It was the beginning of this whole cycle of a bull-run.

I think 2011 will continue to be an active year for the stock market, particularly in the first half.

But the second half calls for caution.

Overall, the local stock market does present a lot of opportunities this year, but investors will need a lot of wisdom and knowledge in filtering out the risks in order to do well.

I believe this year will be particularly good to stocks in sectors that are related to metal and wood. These include banking, mechanical, machinery, car, hardware, steel, property, textile, timber and construction.

Master Joe Choo ... ‘Market will run higher for now until after the widely expected general election.'

Master Joe Choo, president of Malaysian Institute of Geomancy Sciences:

I would say 2011 is a good year for businesses in the fire and wood-related industries, while others would likely see a not-so-spectacular year for their businesses.

In terms of the local stock market performance, I think the benchmark composite index will continue to run higher from now until after the widely expected General Election takes place a few months down the road.

I think the local stock market will then slow down quite a bit, and we won't see as much excitement after that.

One thing we have to acknowledge is the fact that the trading volume in the Malaysian stock market, in general, is not huge. So, after the euphoria, the market will be rather stagnant.