Return to 1958 and build a century-old giant

Chapter 923 Exchange Rate Differences and Excessive Profits
After returning, Yang Wendong immediately notified Fang Xianming and Hang Seng Bank to prepare. The first tranche of funds, US$5 million, had already been prepared.
The next day, September 13, the Hong Kong government quickly approved Hang Seng Bank's foreign exchange business. In return, Yang Wendong immediately arranged for Zheng Zhijie to personally go to the Lands Department to discuss the purchase of land in US dollars.
This is beneficial to both sides. Changxing Real Estate can acquire a lot of prime land in good locations, while the Hong Kong government can obtain scarce US dollar foreign exchange. It's a win-win situation.
However, Yang Wendong was not too concerned about this. In fact, at this time, as long as you have US dollars, you will not have trouble buying property. It's just that it is not as convenient as negotiating with the Hong Kong government. After all, the Hong Kong government's land is in large tracts, and such land or property is not easy to find on the market.

Similarly, such large-scale purchases, since they do not go through the market, will not have an impact on the market, which is more conducive to future bottom-fishing.
Of course, the most crucial bargain is still the super lucrative piece of land in Hongkong Land; other land plots are just icing on the cake.

"Can you exchange US dollars at Hang Seng Bank now?" A crowd gathered around a newsstand in Central, discussing the matter.

"What? Hang Seng has US dollars on hand?"

"No way, even if they have US dollars, why wouldn't they keep them for themselves and instead exchange them now?"

"Sigh, you may not know this, but after the Ho family withdrew from Hang Seng Bank, although it is said to be independently operated by professional managers, the largest shareholder is actually Yang Wendong. With Yang Wendong's overseas financial resources, it is not surprising that he has some US dollars."

"What? Yang Wendong controls Hang Seng Bank?"

"That makes sense, but why is Yang Wendong willing to take out US dollars? Does he think there are too many US dollars?"

"Those are big capitalists, their ideas are naturally different. Maybe there are other political reasons, but who cares? Are you going to switch? If you're going, we'll switch together?"

"Okay, the date is the 16th. In two days, we'll go to the Hang Seng Bank. Let's go early, I reckon there will be a long queue."

"Um"

As the news spread in various newspapers, the whole of Hong Kong knew that Hang Seng Bank was preparing to start a foreign exchange business.

Similarly, many people know that Hang Seng Bank is backed by Yang Wendong, which means that Yang Wendong is optimistic about the future of Hong Kong, or rather, he is optimistic about the "Hong Kong dollar". This makes many people hesitate about whether to exchange their money.

In no time, news spread in Hong Kong, and even the number of phone calls increased. People from all sides were discussing that this was a moment that could determine the fate of half a lifetime's hard-earned money.
Early in the morning of the 16th, the street in front of Hang Seng Bank in Central:

"Good heavens, I rushed here at 4 o'clock to queue up, and the line is already endless. When did this group of people arrive?" a middle-aged man in his 30s muttered.
An older woman ahead turned around and said, "Young man, everyone here arrived last night. Look, there are tents ahead, and many people are sleeping here."

"That's crazy," the middle-aged man said helplessly.
The old lady replied, "If I weren't so old and unable to stay up all night, I would have come long ago. Now many shops don't accept Hong Kong dollars. Imagine how anxious it would be if you could earn so much money in your life and then not be able to buy anything."

The middle-aged man said, "Yes, judging by the time, the bank is about to open. I wonder what the exchange rate is at Hang Seng Bank?"

"Isn't it based on the Hong Kong government's exchange rate?" the old lady asked hurriedly.

The middle-aged man glanced at the old woman, and considering that she was elderly, he patiently explained, "Grandma, Hang Seng Bank allows free exchange, not according to the Hong Kong government's exchange rate. It was already mentioned in the newspapers before, didn't you see?"

"Oh dear, my eyesight is bad, I can't read the newspaper, I just heard it from others," the old lady said hurriedly. "I was thinking of exchanging US dollars at the Hong Kong government's exchange rate, and then going to collect more Hong Kong dollars."

The middle-aged man was speechless. This kind of way to make money, how could it be possible for an old woman who can barely walk?
However, he didn't say anything more. If the other person got so angry from the information he received, he might have to take responsibility for it.

Just then, a commotion came from ahead. Looking over, Hang Seng Bank finally opened its doors, and the group of people at the front of the line immediately rushed in and followed the signs to the foreign exchange window.
However, when the group saw the data on the windowsill, the leader immediately shouted, "One US dollar is worth 10.5 Hong Kong dollars! Why don't you just rob someone? That's about the same price on the black market!"
The bank employee in the lead explained calmly, "Ladies and gentlemen, we operate on the principle of freedom. If you find other places more affordable, you are free to leave."

"But... this is too much..." For a moment, the person who had just shouted probably lacked the ability to describe it, so he said, "As a bank, shouldn't you offer some better deals than other places?"

"Sir, let me reiterate, it's free trade. If you feel it's not worthwhile, you don't have to do business with us." The employee continued, "As for the price, why should we offer a discount compared to other places?"
Furthermore, in terms of the amount, we are much larger than other places. Unless it is particularly large, there is basically no limit. It's first come, first served.
"Sir, if you don't need it, please make way. The people behind you need to carry out their own business."

After hesitating for a moment, the leader finally said, "Okay, I'll exchange it for ten thousand US dollars."

Although the prices on the black market are similar, and some may even be cheaper, the quantities are not as good as those in legitimate banks, and their origins are unclear. If they involve illicit funds, then you're doomed.

Although you might lose a lot of money trading through a bank, at least you get normal US dollars.

"Okay, this way please. If you're exchanging US dollars, we'll also need to open a bank account for you, where the dollars will be stored," the bank clerk explained.
The bank does offer USD exchange services, but it doesn't directly use cash for transactions. Instead, the money is kept in bank cards, which allows for greater leverage. For example, $5 million can be used as $15 billion.

Therefore, these employees also encourage customers to keep their funds in bank accounts.

"What if I insist on withdrawing cash?" the person asked.
The bank clerk said, "Of course, it's just $10,000 in cash. Are you sure you want to take it home?"

The person who came hesitated.

At that time, Hong Kong was not very safe either.

The bank employee said, "Hang Seng Bank has been operating in Hong Kong for decades, and its major shareholders are top conglomerates in Hong Kong. Don't you trust our bank?"

"Okay, I'll only withdraw $2000, and keep the rest in my bank account," the person said after thinking for a moment.
On the one hand, he knew that Hang Seng Bank was backed by Yang Wendong, Hong Kong's richest man, with immense wealth, so there was no major risk. On the other hand, carrying $10000 with him was indeed too dangerous.

In this era, there are plenty of people who would kill or commit arson for HK$1, not to mention the large number of refugees who would do anything for money.

The bank clerk politely said, "Okay, please follow me."

There are still quite a few people who want to exchange currency, and Hang Seng Bank naturally agrees to each and every one of them. At the same time, they also try their best to encourage them to deposit US dollars into their own bank accounts.

Because it is easy to exchange currency and there are almost no limits, many people have developed a certain degree of trust. Except for a small number of people who asked to withdraw cash or remit money to overseas banks, most of the US dollars returned to Hang Seng Bank's accounts.
"Haha, we exchanged $30,000! Now we don't have to worry about the Hong Kong dollar depreciating anymore. This $30,000 is definitely our safe haven for the future," a man said with emotion after returning to his family following his transaction.
“We exchanged it for 10.5. If the Hong Kong government stabilizes the situation, we’ll lose 15 Hong Kong dollars,” the middle-aged woman said worriedly.
The man shook his head and said, "Perhaps, but asset diversification is something we must consider."
"Our entire fortune is in Hong Kong. If the Hong Kong dollar really collapses, our lifetime wealth could vanish. That risk is much greater. Relatively speaking, losing HK$15, while not a small amount, isn't enough to cripple us."

"Yes, that's all we can do for now," the middle-aged woman nodded and said.

Their family can be considered an upper-middle-class family in Hong Kong. Over the years, they have accumulated considerable wealth in Hong Kong and own several houses.

They originally thought they could weather the economic crisis, but they never expected the Hong Kong dollar to suddenly run into problems, which terrified them.

They rushed to the black market to exchange for US dollars, but they didn't know how and even exchanged some counterfeit money, which almost made them vomit blood. Now that they have reached a deal with a major bank, they can finally relax.
The next morning, Yang Wendong went directly to the headquarters of Hang Seng Bank:

"Mr. Yang." A man of about 50 years old came downstairs to greet him: "Welcome to Hang Seng Bank."

"Old Zhou, go up first." Yang Wendong nodded;
This Mr. Zhou is the professional manager that He Shanheng hired after his retirement to manage Hang Seng Bank.

"Yes, Mr. Yang."

After the two went up, Yang Wendong arrived at his private office inside Hang Seng Bank, which had a direct view of Victoria Harbour in the distance. However, his offices in various branches in Hong Kong were basically the same.
For countless Hong Kong citizens, a beautiful view room is something they dream of, but for him, it's nothing.
After sitting down, Yang Wendong took a sip of coffee and asked, "How many US dollars did Hang Seng Bank exchange yesterday?"

Zhou Zhiqiang replied, "Mr. Yang, a total of US$1.45 million was exchanged, but only US$2800 million was actually withdrawn or transferred."

"In other words, we actually only spent less than 3000 million US dollars to get almost 15 billion Hong Kong dollars?" Yang Wendong said with a smile.

Even without considering leverage, based on a future exchange rate of 7.8, this HK$15 billion net profit would amount to around HK$3 million.

The speed at which money can be made in finance is ridiculously fast. Of course, this is also because Yang Wendong knows the future and dares to gamble.

Otherwise, under normal circumstances, the risk of doing so would be extremely high, so it would be reasonable to obtain such a high rate of return.

Zhou Zhiqiang said, "Yes, with our preparations, we can continue like this, and in the future, it is possible to exchange more than 10 billion Hong Kong dollars."

“Okay, continue. Locking up enough Hong Kong dollars will also stabilize the Hong Kong dollar exchange rate,” Yang Wendong nodded and said.
Although he also made huge profits by taking advantage of the unstable Hong Kong dollar exchange rate, this was only short-term. In the long run, his many assets and properties in Hong Kong were the real prize.
Furthermore, by stabilizing the Hong Kong dollar himself, he will solidify his future position in Hong Kong, which is something that money cannot buy.

Just as a country needs a war to truly become powerful, a conglomerate also needs such a massive financial event to grow large.

“Yes, Mr. Yang,” Zhou Zhiqiang continued, “However, if we use excessive leverage, I’m worried that there will be too high risks associated with the US dollar.”
Although this matter is kept strictly confidential internally, it involves such a large sum of money that it's difficult to guarantee it won't be leaked.

Yang Wendong said, "Don't worry, I've been prepared. You think I only prepared $5 million? I'm in the United States, and I can transfer more funds back to Hong Kong at any time. You just do your thing."

The profits earned from the huge gains in gold in the early years were basically invested in the stock market in Europe and the United States, leaving very little cash.

However, the stocks he invested in, such as Coca-Cola, Pepsi, General Electric, and Walmart, were all top-quality stocks. With just one phone call, he could obtain hundreds of millions or even more funds from major American banks.
Not to mention, in recent years, Honor Electronics has monopolized the gaming market and has made several hundred million US dollars in profit every year. These profits are held in various overseas banks, and some have been invested in the US stock market.

The saying "a cunning rabbit has three burrows" also applies to finances. Nowadays, much of his capital is stored in different banks in different countries. In the pre-internet era, it was very difficult for other large conglomerates or even governments to investigate.

“Okay, then I can rest assured,” Zhou Zhiqiang replied.

Yang Wendong added: "Neither the mainland nor Britain will allow the Hong Kong dollar to have problems. Our time should not be long. After a while, this matter will be over."
For you, the first priority is to make money from this, and the second is to acquire as many clients as possible. Many of these clients come from HSBC, and many others are companies doing business overseas. The key is to retain these companies long-term; this will lead to higher future profits.

The Hong Kong government's lack of foreign exchange has also dealt a significant blow to HSBC, which was previously considered the safest bank in Hong Kong, but now it is facing a shortage of foreign exchange.
Of course, this cannot be blamed on HSBC, since the bulk of foreign exchange is controlled by the Hong Kong government;
But this also presents an opportunity for Hang Seng Bank.

“Okay, I will try my best to win over these big clients,” Zhou Zhiqiang replied.

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(End of this chapter)