HONG KONG — There are all sorts of reasons for the Hong Kong stock market to have the jitters these days. The Chinese economy remains wobbly. North Korea is threatening nuclear war. And perhaps most worrisome this week, a leading Hong Kong actor has a new movie coming out.
Hong Kong investors call it the Ting Hai effect: whenever the actor Adam Cheng has a new television show or a new movie, the Hang Seng index often takes a dramatic turn for the worse. And in a city where superstitions can guide daily routines, the financial sector is worried.
Mr. Cheng’s new movie, “Saving General Yang,” has its debut in theaters Wednesday, and investors in the Hong Kong market, which has been generally buoyant of late, are on guard, while acknowledging that it is unlikely that a movie opening could drive a major market index.
“Of course, investors need to be wary to an extent,” said Thomas Wong, a Hong Kong banker. “That is part of the job, but they shouldn’t let a movie decide whether the stock market will do well or not. That is not how the market works. People may talk about it, but they are not going to take it seriously.”
The Ting Hai effect has its roots in the 1992 debut of a television series called “The Greed of Man,” which turned a critical eye on members of the city’s investment community and their supposed shady doings, with Mr. Cheng in the role of Ting Hai, who made it rich selling derivatives during a bear market. As the first episode was being broadcast, the Hang Seng dropped an alarming 13 percent at one point.
Investor concerns about his acting appearances were reinforced two years later, when the market took a nearly 14 percent drop with the debut of his television series “Instinct.”
The unpredictability of financial markets has long fed superstitions about stock market behavior. One school of thought suggests that market downturns coincide with the construction of the world’s tallest building: think the Empire State Building in New York in 1930, the Sears Tower in Chicago in 1974 and the Petronas Twin Towers in Kuala Lumpur in 1998. And until recent years, there was a notable correlation between bear markets and teams from the American Football Conference winning the Super Bowl.
In Mr. Cheng’s case, the market has not always become agitated when he starts a new role: in six of his 17 television program debuts, the Hang Seng rose, according to The South China Morning Post. But that has not allayed investors, and now Mr. Cheng has another new movie. “Saving General Yang” has the actor in the lead role of a drama about a general in the pre-derivatives Song Dynasty, 1,100 years ago.
“Hong Kong investors can be very superstitious,” Francis Cheung, an analysts at the brokerage firm CLSA, wrote about the Ting Hai phenomenon. “And Adam Cheng is a very well-known actor with a large following.”
Investors spooked by superstitions already have reason to worry. This is the Year of the Snake, and four of the last five snake years, beginning with 1953, produced down markets, according to CLSA, which publishes a tongue-in-cheek “Feng Shui Index.” Snakes are skin shedders, whose years are associated with major transformations and change — and the Tiananmen crackdown, Pearl Harbor and the onset of the Great Depression, in 1929.
A CLSA report on the Ting Hai effect — again, tongue in cheek — found that the more tragic the story line in an Adam Cheng movie, the worse the impact for the market. While the details of the plot of “Saving General Yang” have not been revealed, in history, the general met a bad fate — dying of starvation after being captured in battle.
Calvin Yang contributed reporting.
Article source: http://www.nytimes.com/2013/04/03/business/global/for-hong-kong-markets-bad-omen-in-a-movie-premiere.html?partner=rss&emc=rss