Feng Shui which has been used by brokers to predict the stock market has been banned by China’s Securities Regulatory Commission.
Reuters recently reported that the country’s top securities regulator has initiated a crackdown on brokerages employing feng shui – an ancient Chinese tradition – to predict stock market trends in notes to clients, despite Beijing’s vows to ease up on its crackdown on Chinese financial markets.
According to Reuters, China’s Securities Regulatory Commission has announced a “zero tolerance” policy barring brokers from using feng shui to explain stock recommendations, citing local media reporting in the Chinese Securities Journal.
Some brokers who used feng shui approaches in their market projections and investment advice have been punished as part of the crackdown. ‘Heavenly stems’ and ‘earthly branches,’ also known as tiangan dizhi, Yin-Yang, and Five Elements, are examples of such techniques.
The original report didn’t name any brokerages by name and didn’t provide much information.
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Over the last year, the CSRC has issued warning letters to a number of Chinese brokerages, including Guosheng Securities and Essence Securities, for publishing reports that included feng shui features.
While the CSRC is under a lot of pressure to maintain’stability’ in Chinese markets, it’s hard to envision these approaches being any worse than what American experts (for example, technical analysts) do to recommend trades to their clients.