The Year of the Dragon might burn Hong Kong this time around

Yes, there might be a co-relation, however tenuous, between the Hang Seng Index’s growth and prosperity in Dragon Years.

But that might not be true for 2012.

The past three Dragon years (1976, 1988 and 2000) were all good years for the Hang Seng index, claim the geomancers behind the controversial Feng Shui Index, a "mystical" attempt at predicting the year ahead for markets through consultation of the 12 animal Chinese zodiac.

If so, 2012, the Year of the Black Water Dragon, should be the fourth Dragon Year that smiles on the Hang Seng and its investors. Yes, there will be smiles but it’ll happen later on in the year.

CLSA Asia-Pacific Markets, the company behind the controversial Feng Shui Index, believes 2012 will start slowly for the Hang Seng before picking up in August and driving the market upwards. But there's the Eurozone crisis to consider, and no one (economists or geomancers) expect this threat to vanish in 2012 like a puff of dragon smoke.

On the bright side, 2012 should see more babies born in Hong Kong. The Hong Kong Census and Statistics Department said this was true in the previous Dragon Years of 1988 and 2000.

As for business, 2012 should smile on cement companies and frown on petroleum and utility companies. One senior analyst recommends investing in markets still offering healthy growth rates such as China despite its mounting financial woes.

CLSA, which is based in Hong Kong, is 65% owned by Crédit Agricole, France’s largest retail-banking group.