“I don’t like the snake at all, it’s not good for the monkey.” This is no environmental lament, but 32-year-old Shanghai resident, Yim Mee Sun, ruing her birth in a simian year.

Chinese people stepped into the ‘year of water snake’, on February 10, with a lot of trepidation about personal fortunes. As beliefs go, the reptile has a traditionally negative effect on stock market returns and Chinese investors lost no time indulging in the voyeurism of ‘ill omen.’

That’s until Hong Kong-based stock brokerage, CLSA Asia-Pacific Markets, released its annual ‘Feng Shui Index’ after the Chinese new year - a prediction on financial markets based on the Chinese zodiac. CLSA’s Feng Shui Index indicated that while ‘snake years’ usually bring radical changes, this particular year shows a “good balance of the five fundamental elements and will keep any upheaval in check.”

This was beefed up by other financial Feng Shui experts like Edgar Lok Tin Yung, who runs the website loktinfengshui, and advises people on investment. “According to my prediction, the second half of the ‘year of the snake’ will be better. Those speculating in the share market must be very careful in May, August and November. Transportation, aviation, logistic, shipping and retail stocks will not do well in 2013. All in all, the second half of year will be better. Metal is one of the hidden elements stored inside the snake. It will be pulled out in the rooster month of September when metal industries - including gold, silver, copper - will become active again, along with banking and finance.”

So how profound is the impact of Feng Shui and superstition on actual stock movements, especially when ‘expert advice’ on stock picks abound on the Internet? What happens when people, overwhelmed by the unpredictable capital market, start acting on unconventional sources of investment advice. China’s A-share market has 78 million retail investors with 168 million trading accounts but the mainland China stock markets were the worst global performers in 2012, plunging below 2000 from the 6000 plus peaks of 2007. A record number of trading accounts closed down last year as burnt investors withdrew from the market. China faced a peculiar crisis where the real economy grew and the stock market tumbled. Did these uncertainties drive people to faith in the supernatural?

Mariana Kou, research analyst at CLSA Consumer & Gaming Research, said, “We see strong investor interest in our Feng Shui Index predictions, but it would be hard to quantify how many investors have made their decisions accordingly.” Kou, who unveiled the Feng Shui Index, along with her colleagues, last month, says, that although there is a lot of feedback and investor interest, the company’s Feng Shui Index is a strictly tongue-in-cheek view of the market, meant to cheer people up after the Chinese new year holiday season ends.

Despite the popularity - CLSA has expanded its Feng Shui forecast to a bilingual 68-page publication - it remains difficult to gauge the impact of astrological predictions on the market. Anecdotal accounts suggest that retail investors may resort to Feng Shui while taking decisions, but these remain in the realm of ambiguity. Yim Mee Sun, who fears that her monkey sign may not gel very well with the snake year, says, “I don’t necessarily follow Feng Shui, but if I run across a zodiac alert that specifically warns investors not to buy on a particular day or choose a specific stock, I pay heed.” The last time Yim suffered a loss was in 2011 when she invested RMB 20,000 in the Dalian Futures Market and lost almost 40 percent of her investment. Since then, she has been cagey and the apparent mismatch between a snake and monkey does not inspire her to act.

Vicky Kim, another professional in her early 30s, working in a foreign insurance company invests nearly RMB 20,000 to 30,000 every year in the stock market, and is fond of flipping through Feng Shui columns. “I don’t generally follow Feng Shui during investment, but if one can learn and use it properly, I believe there is no harm,” says Vicky. Feng Shui maser Edgar Tok naturally has greater faith and believes Feng Shui predictions have the ability to influence stock movement. “Not only investors, but also businesspeople and government officials have strong faith in Feng Shui. Of course, there is no 100 percent success rate in predictions. My general predictions have more than 70 percent success rate,” he says.

State not stars

But this being China, government regulations and policy making trump fortune-telling. A large section of retail investors tend to follow macro-economic data and every policy announcement more keenly than zodiac forecast. Mr Wu, a senior manager with one of the largest energy trading firms based in Ningbo, south China, has a pragmatic approach. Armed with a large stock portfolio, the volume of which he is loathe to reveal, Wu scoffs at any mention of Feng Shui and prefers to base his decisions on macro-economic conditions and policy trends. Used to moving large volumes of commodities in the course of his profession, Wu keeps a close ear to the ground within his industry. He believes that the Chinese year of the snake will be a good one “but only because of the new government leadership who may bring in newer opportunities,” he says optimistically.

Similar views are held by Harry Law, managing principal at consultancy firm CGN, who prefers to follow company profit & loss statements, analyst reports and even recommendations from friends, instead of banking on Feng Shui. He points to the irrationality, saying, “The year of the snake was supposed to be bad, but look at the Shanghai market which has had a cheery beginning,” he says.

Shengtao Jiang, a management student, is also critical of astrological predictions. Once an enthusiastic investor in China’s stock market, he remained focused on macroeconomic environment, policies, industrial outlook and company analysis based on publicly disclosed information. “Never have I been influenced by Feng Shui. I am a supporter of pure analysis and rational decision making. I do not have any idea abut how the Chinese Zodiac works for me, but personally I dislike snakes. So, hopefully, this sentiment would not incur something unpleasant in the year of snake!” he says.

Professional analysts with fund and brokerage houses too are dismissive of this trend. Gawin Chen, investment consultant with the well-known Tianyi Securities says, “Sometimes groups of elderly people tend to believe in Feng Shui but it is difficult to say if this has an impact on the market.” Another prominent institution CITIC group is equally dismissive about the impact of astrology on the market.