Grazing on good fortunes in the Year of the Ram

On a closer look, the first few months of the Lunar New Year look promising as the wood element feeds the fire and earth elements that are dominant in the "first leg" of the ram year. February, March and April are expected to be particularly good for investors.

As August, September and October bring in the "third leg", sectors linked to metal and water should improve, while the earth element declines and then rises in the last month.

For investors, this means that sectors like oil and gas could do well and gold should shine while companies in other sectors, like those linked to the Internet, could be made "crispy" by the fire element, which implies a lot of volatility.

The water element toward the end of the year and the "fourth leg" will dampen the earth element, so transportation, renewables, the Internet and finance should all strengthen during this period in November, December and January.

A word of warning though: Chinese mainland investments - including those linked to real estate and retail - could decline in this last leg and give back some of the gains from the first three months of the year.

During the last few months of the lunar year it might be best to avoid investments in these sectors.

Based on how this particular ram year is shaping up, fortune is expected to come from the north, so it makes sense that it could flow from the mainland into Hong Kong. One channel for this, says Yau, could be the Shanghai-Hong Kong Stock Connect launched last November, which allows global investors to access the mainland's stock market in Shanghai through the Hong Kong Stock Exchange.

The layouts of the elements would also be positive for an expected Shenzhen-Hong Kong Stock Connect program.

Looking back, previous ram years have been kind to the Hang Seng Index.

In 1991, it started around 3,400, powered upward to 4,000 by July, and hit 4,500 by the following January.

The next Year of the Ram, 2003, was more challenging. The index hit a bottom 8,442 in April as the outbreak of severe acute respiratory syndrome, or SARS, spread, but quickly rebounded and rose to 13,750 by January 2004.

The Feng Shui Index also looks at the prospects for property investments in Hong Kong. After some careful consideration, Yau suggests that it might be best for investors to avoid areas in Hong Kong's west. Based on the elements, locations in the east could be more promising.

The ram is the eighth of the 12 signs of the Chinese zodiac and stands between the horse and monkey. It is related to Chinese characters with generally good meanings such as luck and positivity.