Chinese regulator cracks down on fengshui in stock market forecasts, Latest Business News - The New Paper

Chinese regulator cracks down on fengshui in stock market forecasts

SHANGHAI (Reuters) – It is not known if any geomancers saw this one coming.

China’s securities regulator has launched a crackdown on brokerages using fengshui to predict stock market trends in their research notes or investment advisories, state media reported on Wednesday (March 30).

The China Securities Regulatory Commission has “zero tolerance” for illegal behaviour in the stock market, according to the official China Securities Journal.

Some brokers have been punished after they analysed, forecast, or offered investment advice by applying aspects of fengshui such as the heavenly stems and earthly branches, also known as tiangan dizhi, Yin-Yang, and Five Elements, the newspaper said.

It did not offer more details or name any brokerages that were fined by the regulator.

Some Chinese brokerages, including Guosheng Securities and Essence Securities, have received warning letters from the regulator over the past year after they released reports applying fengshui to investment strategies, according to statements on the regulator’s website.

Some of these notes prompted wide market discussion.

The latest crackdown comes at a time when Chinese stock markets are experiencing higher volatilities, with the blue-chip CSI 300 Index losing about 14 per cent so far this year.

Hong Kong-based brokerage CLSA publishes a tongue-in-cheek Feng Shui Index ahead of Chinese New Year that uses the zodiac to predict stock performance. It remains popular among investors.