Return to 1958 and build a century-old giant

Chapter 924 The Return of Huge Profits

In the following days, Hang Seng Bank continued to exchange US dollars and Hong Kong dollars, almost as much as needed, with only exchanges exceeding one million Hong Kong dollars subject to some restrictions.
Meanwhile, many Hong Kong tycoons also called Fang Xianming, intending to quickly exchange a large sum of Hong Kong dollars.

After learning about this, Yang Wendong thought for a moment and said, "We can agree to their request, but we can raise the exchange rate a bit more. Since they are so pessimistic about the Hong Kong dollar, paying a little more shouldn't be a problem."

"Haha, Mr. Yang, this kind of practice is unheard of in the banking industry," Fang Xianming said with a laugh.

It's not just the banking industry; other real industries, the financial industry, and even the real estate industry have always offered discounts for larger transaction volumes. But this time, it's the other way around.
Yang Wendong said, "The Hong Kong dollar almost collapsed because of this group of people. Some of them may even have their own selfish motives. Some may even be learning from American hedge funds to attack a country's foreign exchange. I'm already letting them off easy by doing this."

Capital knows no borders. When their own country's currency has problems, the first thing big capitalists usually think about is not to stand with the government to protect the currency, but to find a way to exchange it for foreign currency and leave.

This was also the root cause of the Asian financial crisis that broke out more than a decade later. Otherwise, no matter how powerful Soros and others were, they would not have been able to confront so many countries in Asia.
It was by exploiting the greed and fear of countless people and domestic capitalists that they were induced to exchange foreign currency, which ultimately led to the collapse of the country's foreign exchange reserves and the forced devaluation of the currency.
Ironically, it was precisely because so many people worked together that the outcome became real, which further validated their "correctness."
However, the wealth of most families in a country is severely damaged as a result, and many people even lose their lives because of it.
Fang Xianming said, "Yes, if these people hadn't exchanged their currency, the Hong Kong dollar wouldn't be in this problem today. It's just that people are greedy, there's nothing we can do about it."

"Okay, that's settled then. You work with Zhou Sheng and observe the situation. If the exchange rate continues to rise, then we'll adjust it again. I want to see how much these people will ultimately lose," Yang Wendong continued.

He was perfectly content to profit from this financial scissors difference, since these people didn't trust the Hong Kong dollar.
In fact, after exchanging their currency for US dollars, these people would even be eager for the Hong Kong dollar to actually collapse. This way, they would not only make a huge profit by holding US dollars, but also prove the correctness of their earlier actions.
Fang Xianming agreed, "Okay."

"What? 11 Hong Kong dollars to one US dollar? Mr. Fang, are you running a bank or robbing a bank?" a 50-year-old man in a suit asked in shock and anger.

Fang Xianming took a sip of tea and calmly said, "It's a free trade. If Mr. Fan feels it's not worthwhile, then he can simply not trade. The same applies to everyone else."

The faces of the several people in front of him were blank. One of them said, "Mr. Fang, our amount is so large, which is very convenient for your bank. Otherwise, your bank would have to deal with hundreds or even thousands of ordinary customers. This amount is so large, it's one thing for you not to give us a discount, but how can you raise the price?"

Fang Xianming put down his teacup and said, "This is not a normal transaction. We are offering US dollars for exchange on behalf of the Hong Kong government to stabilize the Hong Kong dollar market. Do you think I don't know what you're thinking?"
From your perspective, I also lose more money the more I exchange currency, so I don't really care if many people come to exchange currency; it would be better if they didn't come.

So, since you all want to exchange over a million dollars, it's even less profitable for us, hence the higher fee.

The people in front were momentarily speechless. What Fang Xianming said seemed to make some sense.

Fang Xianming continued, "This matter involves a lot of money, starting at tens of millions. There's no need for you to give an immediate answer. Go back and think about it."

Both Zhou Sheng and I have your contact information. If needed, just call us directly. The ratio is 11:1. As long as you agree, anything under ten million US dollars can be directly exchanged.

"More than ten million US dollars, surely the prices are different?" someone asked again;

Fang Xianming laughed and said, "Of course. For transactions over ten million US dollars, we do not accept cash transactions. They require exchange in the form of high-quality properties in Hong Kong or other high-quality assets."

The Cheung Hing Group has no shortage of Hong Kong dollars, so having more would be good, but there's no need to rush.
At a time when all parties are seeking the US dollar, coupled with a lack of confidence in Hong Kong's local market, it is the perfect time to buy quality properties at bargain prices. Naturally, using the US dollar is even more attractive.

"High-quality property?" Several people glanced at it in succession;
Clearly, Yang Wendong, the man behind Hang Seng Bank and Chang Hing Group, is still very optimistic about the future of Hong Kong.

This made them hesitate again, after all, this person had never made a loss-making business before;

Time flew by and it was almost the end of September. After half a month, Hang Seng Bank had almost opened up its exchange services for US dollars, which made many people wait and see.

After all, if the Hong Kong dollar exchange rate stabilizes in the future, their actions today would represent a huge loss.

Yang Wendong, Hong Kong's richest man, is clearly optimistic about Hong Kong's future, which has given many hesitant people a glimmer of confidence.
The crisis of confidence in the Hong Kong dollar seems to have eased considerably.
In response, the mainland, the UK, and the Hong Kong government published articles praising Hang Seng Bank for its sense of responsibility and its significant contribution to stabilizing the Hong Kong dollar exchange rate.
However, the root cause of the Hong Kong dollar crisis is still the Sino-British negotiations. The recent failed negotiations caused the Hang Seng Index to plummet again, while the number of people exchanging Hong Kong dollars increased.

Fortunately, Hang Seng Bank's stock price rose slightly, which stopped some hesitant buyers from making a purchase.

Kang Le Building:

"Mr. Yang, the funds have been almost used up recently." Zhou Zhiqiang reported: "Before, many people exchanged their money for US dollars and then deposited it into our bank account."
However, due to what happened a few days ago, many people have started applying to transfer their foreign exchange abroad, which has made our previous leveraged trading unsustainable, forcing us to use real US dollar funds to cover the losses.

"I've heard that too. There's been a lot of people immigrating from Hong Kong lately, and officials from Canada have even contacted me," Yang Wendong said, shaking his head helplessly.

During this period, there has been a strong trend of emigration from Hong Kong. As a result, Australia and Canada, two former members of the Commonwealth, have taken the initiative to set up offices in Hong Kong to facilitate immigration or related consultations for wealthy Hong Kong residents.

Zhou Zhiqiang said, "Yes, immigration and overseas investment are all real things that require transferring funds out of the country."

“I will arrange another $5 million, which should arrive by tomorrow at the latest, so don’t worry.” Yang Wendong nodded and said, “The Hong Kong government has also sent me new information. They will set a new exchange rate for the Hong Kong dollar. Once the Hong Kong dollar stabilizes, our mission will be over.”

After all, it's just a short-term way to make a quick buck. This kind of business can't last forever. If it does, the Hong Kong dollar will really be finished, and his early investment might really be a complete waste.
From an outsider's perspective, this business transaction does indeed carry some risks, but the potential rewards are also high. Fang Xianming, standing nearby, asked, "What's the new exchange rate?"

Yang Wendong said, "They can't possibly tell us this kind of thing, but I estimate that the exchange rate will be between 7 and 8 for US dollars. We previously raised the price to 11, and then it became difficult to exchange. The Hong Kong government will definitely take a middle value."

“Well, that’s good. If the exchange rate eventually stabilizes at 7-8, then our profits this time will be more than one billion Hong Kong dollars.” Zhou Zhiqiang’s eyes lit up: “That’s equivalent to more than two years’ worth of profits for Hang Seng Bank.”

Yang Wendong said, "That's how economic crises are; there are opportunities within dangers. It all depends on whether you can seize them and whether you dare to."

"Yes." Zhou Zhiqiang nodded;
After another round of casual conversation, Zhou Zhiqiang got up to take his leave. Fang Xianming then said, "Mr. Yang, I have something else to report to you privately. A few British guys have come to me. They want to exchange their shares in Hong Kong Land for US dollars with us."

"How much stock do you own?" Yang Wendong asked immediately.

Zhou Zhiqiang said, "A total of about 3% of the shares, based on Hongkong Land's market value today, is worth about HK$3.8 million, or about US$3300 million according to our exchange rate, but they insist on US$4000 million."

“$4000 million, okay, agree to it.” Yang Wendong nodded and said, “Under the current control of Yizhi Mutual Holdings, it is not easy to acquire 3% of Hongkong Land’s shares. Acquiring Hongkong Land is our next strategic goal, and we can accept spending a little more.”

It's normal to pay a premium when acquiring a company.

After the Hong Kong dollar crisis, amidst the entire real estate crisis, what he still needed to do was to take countermeasures.

However, Yang Wendong couldn't say for sure how much success there was in the cross-control of Yizhi. Before that, the more shares he held, the better.

Fang Xianming agreed, "Okay, I'll make the arrangements right away. I'll also try to negotiate the price down a little."

“Okay, this matter needs to be kept confidential for now.” Yang Wendong continued, “Also, since they are shareholders of Hongkong Land, they should know other Hongkong Land shareholders. Try again to see if you can contact other Hongkong Land shareholders through them. Hongkong Land is not performing well right now, and I can buy their shares in US dollars and British pounds.”

“Alright, this is indeed our opportunity,” Fang Xianming said.
Yang Wendong then asked, "How many shares of Jardine Matheson do we hold now?"

“Currently, it’s only 11%. Under Yizhi Mutual Control, the number of shares in circulation is not very large, making it difficult for us to acquire them,” Fang Xianming replied.

Yang Wendong nodded and said, "Yes, this move is indeed ruthless. However, with such a large debt of Hongkong Land, it is our opportunity. I remember that Hongkong Land still has a lot of foreign exchange debt with overseas banks. The recent depreciation of the Hong Kong dollar has had a huge impact on them. After this, we will focus all our efforts on targeting Hongkong Land."

Fang Xianming laughed and said, "Yes, Hongkong Land borrowed a lot of foreign currency from Japanese and European banks before. Once the Hong Kong dollar depreciates, Hongkong Land's asset collateral and value will plummet when calculated in Hong Kong dollars."

“Alright, get ready, this will be a tough battle,” Yang Wendong said. “Once their debts collapse, we will crush Jardine Matheson. Only by putting them in a do-or-die situation can we have our chance.”

Hongkong Land's current market value is just over 10 billion. Under normal circumstances, it would not be difficult to acquire it. However, with the mutual control of Yageo and the protection of the Hong Kong government, it would be quite difficult.

Fang Xianming said, "Okay, now that there's a Hong Kong dollar crisis, some overseas banks with business in Hong Kong are thinking of selling off their debts. I'm thinking of whether we can acquire some of Hongkong Land's overseas debts, so that we can become its largest creditor."

“Okay, let’s take it.” Yang Wendong agreed: “If Jardine can withstand that much pressure, we won’t lose money. If Jardine can’t withstand it, then we will definitely not lose money by acquiring Jardine.

"Yes, Mr. Yang," Fang Xianming replied.
October arrived quickly;
During this period, Hang Seng Bank continuously released more than US$15 billion in funds, which seriously eased the currency crisis in the Hong Kong market and even indirectly cracked down on and eliminated the previously rampant black market.

In the real estate sector, Cheung Hing Properties, relying on the US dollar, has reached deals with many local Chinese and British consortia in Hong Kong, acquiring a total of approximately 250 million square feet of property, located in various towns and cities throughout Hong Kong, including some in Central.

From then on, Cheung Hing Properties firmly established itself as the number one real estate company in Hong Kong.
On October 16, the Hong Kong government issued a notice that, effective immediately, the exchange rate between the Hong Kong dollar and the US dollar would be changed to 7.8:1, and HSBC and Hang Seng Bank would serve as the designated exchange institutions for the Foreign Exchange Reserve Fund.

Upon hearing the news, Hang Seng Bank's exchange points immediately changed the exchange rate to 7.8:1, strictly adhering to the official exchange rate.

Starting today, Hang Seng Bank's foreign exchange business will no longer be its own business, but will be a subsidiary of the Hong Kong government's Exchange Fund. No matter how the exchange rate fluctuates in the future, it will have nothing to do with Hang Seng Bank.
Those who were exchanging at HK$10.5 suddenly realized they had lost a fortune.

Among them, some people used financial leverage to borrow Hong Kong dollars to exchange for currency, hoping that the Hong Kong dollar would collapse later. However, they did not expect that the Hong Kong government would directly raise the exchange rate, leaving them with nowhere to go but the rooftop.

Many crazy people went to Hang Seng Bank's exchange points to cause trouble, but Hang Seng Bank was prepared, and Hong Kong police were already in place to maintain order.
These people were not optimistic about the Hong Kong dollar before, and some even shorted it. Now that they have lost, they want to cause trouble, but they will naturally be suppressed by the iron fist.

Kang Le Building;

Zhou Zhiqiang and Fang Xianming arrived at Yang Wendong's office and said happily, "Mr. Yang, Hang Seng Bank exchanged a total of US$15.1 billion this time and obtained HK$160 billion."
At the current official exchange rate, that's roughly worth US$21 billion. In Hong Kong dollars, we've made a profit of US$6 million, or about HK$47 billion.

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(End of this chapter)