In Hong Kong, we build a global business empire

Chapter 668 The Return of Shorting Huifeng Bank: HK$53 Billion!
At 9:00 a.m., the doors of all branches of Huifeng Bank and Hengsheng Bank were closed.

This left many customers who wanted to queue up helplessly gathering outside the door.

A notice posted at the bank entrance read: "Due to a technical malfunction in the bank's system, services need to be suspended for emergency repairs."

In reality, it's clear to anyone with eyes to see that Huifeng Bank may indeed be facing a broken capital chain and is out of money.

The claim of a technical malfunction in the banking system is just an excuse.

It is important to know that although major banks in Hong Kong have introduced different computer banking systems, these systems are still relatively outdated due to limitations in computer technology, and many transactions still rely mainly on manual processing.

While Wardley Company was indeed assisting HSBC in selling its shares, HSBC's original partners were also severely affected by the current predicament, with the share price plummeting.

Giants like Swire Pacific, CLP Power, and Wheelock & Co., which had cross-shareholdings with HSBC, have seen their market capitalization drop several times over due to the bank's influence.

In that case, even if all the shares of these partners were sold, how much money could be obtained?
Moreover, a large number of customers have been requesting withdrawals every day in recent days, making the situation increasingly serious.

To make matters worse, British-owned companies such as Wheelock and Swire also "defected," publicly announcing their intention to transfer funds abroad.

Huifeng Bank is currently in a very difficult and embarrassing situation.

With very little cash on hand and a pitifully small amount of funds to be recovered in the near future, selling stocks wouldn't bring in much money, and on top of that, there were daily runs on the bank, with major clients even coming to the bank to pressure them...

Beset by internal and external troubles, the entire senior management of Huifeng Bank was in a state of utter disarray.

Sir Michael Sandberg, the tycoon of HSBC, went so far as to "disappear," claiming to have gone to the UK to raise funds, but in reality, he was representing the consortium behind HSBC to negotiate with Standard Chartered Bank.

In this situation, even if banks open for business, what kind of business can they conduct?

Therefore, senior executives of Huifeng Bank and Hengsheng Bank directly notified the branch managers to temporarily suspend all business operations, and all frontline employees to stay at home and await further instructions.

After all, banks are currently short of funds, while almost all the business that customers come to do is to withdraw cash, which has created a vicious cycle that cannot be broken.

For now, we can only take a delaying tactic.

News of the actions of Huifeng Bank and Hengsheng Bank quickly spread throughout Hong Kong.

At 9:30 a.m., Hong Kong's four major stock exchanges opened on time.

At this moment, the Hong Kong Stock Exchange is still packed with people.

However, none of them showed any excitement or agitation.

After all, there is still no positive news in the market.

Forget about the good news; the sudden closure of branches of Huifeng Bank and Hengsheng Bank was like a bombshell exploding in the crowd.

The already oppressive atmosphere became even more so, and a sense of panic permeated the trading hall.

The investors looked at each other, whispering amongst themselves, their voices rising and falling.

"With Huifeng Bank closed down, how can we operate in this market?"

"Oh no, oh no, is all my money going down the drain?"

"In this situation, no matter how much the Governor-General's Office intervenes to rescue the market, what can they possibly save?"

"Huifeng Bank is probably finished. Swire Pacific, Cheung Kong Holdings, Hutchison Whampoa, CLP Power and other companies will also be severely affected and fall into unprecedented difficulties. Their stock prices will definitely plummet. The stocks we hold will probably become worthless."

As such concerns spread among the population, panic quickly escalated like wildfire, with various worries and speculations emerging endlessly.

Originally, the Governor's Office responded yesterday that they would give everyone an explanation after the Governor returned to the Governor's Office, and everyone still held onto hope.

But now, those present couldn't think of any way the Governor's Office could save the market.

Can the Financial Secretary's meager funds save Huifeng Bank?

Many investors began frantically selling off their shares in these companies, even though the prices were ridiculously low. They didn't care about the price and just wanted to cash out as soon as possible to minimize their losses.

In the trading hall, the numbers on the large screen, which were already showing red, were now plummeting at an alarming rate.

The staff were overwhelmed, constantly answering calls and processing orders, but they still struggled to cope with the flood of sell-off orders.

Meanwhile, in a small office of Galaxy Securities in the Kang Le Building, a flurry of activity was taking place.

Upon learning of the numerous low-priced listings, Dai Shi's eyes lit up.

With so many people selling off their shares, it wouldn't be difficult for him to complete the task assigned by the boss.

Each trader had their telephone receiver connected to a trader at the stock exchange, engaging in tense and intense communication.

"Place an order for me to buy a large amount of Swire Pacific shares. Buy them all if the price is below HK$3.1 per share!"

"For Cheung Kong Holdings, buy as many as you can, below HK$5.4 per share, don't hesitate!"

"Buy as many Huifeng Bank shares as possible, any below HK$8.2 per share!"

……

Dai Shi paced back and forth, watching the latest reports from his subordinates, and occasionally giving instructions and reminders.

"Watch the pace, don't raise the price too high. What we want is to buy everything at low prices," he said calmly, though his heart was also pounding with excitement at this once-in-a-lifetime opportunity.

At this moment, inside the stock exchange, the investors who were frantically selling their stocks gradually noticed something unusual.

They discovered that their low-priced stocks were being bought up quickly in a short period of time, and the trading volume was increasing.

"What's going on? Why is someone buying in such large quantities?" A middle-aged investor frowned and asked the person next to him in confusion.

"I don't know. The market is in such a mess, who would dare to buy in so boldly?" Another person also looked bewildered.

The news quickly spread within the exchange, and a mix of panic and curiosity began to emerge.

Some investors who were initially determined to sell began to hesitate, worried that they might be overreacting and misjudging the situation.

However, some shareholders who had not yet sold their shares tried to list them at higher prices, but no one paid any attention.

Stocks will only be bought quickly if they are offered at a low price.

For a time, many stock investors were caught in a fierce internal struggle.

Should we continue to hold and take a gamble, or cut our losses in time?

Ultimately, some people will definitely decide to take a gamble and choose not to act for the time being.

However, many people are worried that the stock price will fall even more sharply later. They think that since someone is willing to buy now, they should take the opportunity to sell and avoid missing the opportunity. If no one is willing to buy later, they will suffer huge losses.

Meanwhile, in his office at Galaxy Securities, Dai Shi watched the ever-increasing trading volume, a barely perceptible smile playing on his lips.

However, some traders noticed that the actual number of shares of Huifeng Bank that were bought was much less than the number of orders placed.

It was clear that others were accumulating shares just like them, and this was quickly reported to Dai Shi.

Afterwards, Dai Shi went to the office next door.

Inside the office, Lin Haoran was sitting at the coffee table, leisurely sipping his tea.

"Boss, besides us, there should be other forces buying stocks. Like us, they haven't driven up the price, so they haven't attracted much attention," Dai Shi whispered to Lin Haoran.

Lin Haoran narrowed his eyes slightly, pondered for a moment, and said, "No matter who the other party is, let's proceed according to the original plan, maintain the pace of buying up goods at low prices, and absorb as much as we can. Since the other party is not raising prices, let's not raise prices either, and let's not engage in a price war!"

Several bigwigs naturally knew that Standard Chartered Bank was going to acquire HSBC.

For example, Schjoker of Swire Group must have already known that Standard Chartered Bank was preparing to acquire Huifeng Bank.

It's not surprising that some people here have the same layout.

However, few of these big shots are as bold as him in inhaling such large quantities.

After all, even though it was clear that Standard Chartered Bank intended to acquire HSBC, these people still had concerns.

If the acquisition falls through halfway, or if unforeseen circumstances arise and Standard Chartered Bank fails to acquire Huafeng Bank, causing Huafeng Bank's situation to deteriorate, then all of Standard Chartered's invested funds will be lost.

Therefore, although these people were all secretly accumulating related stocks to varying degrees, they were far less confident than Galaxy Securities and had no fear of Standard Chartered Bank's failure to acquire Huifeng Bank.

After all, for Lin Haoran, even if Standard Chartered Bank's acquisition of Huifeng Bank ultimately fails, his Bank of East Asia also has the strength to acquire Huifeng Bank if circumstances permit.

When the situation became so out of control and irreversible, how could the Governor's Office possibly refuse to allow the Bank of East Asia to acquire Huifeng Bank in order to prevent the situation from deteriorating further?

Of course, Lin Haoran also understood that such an extreme scenario was highly unlikely. Barring any unforeseen circumstances, the final result would inevitably be that Huifeng Bank would be acquired by Standard Chartered Bank.

After Dai Shi finished his report, he hurriedly returned to oversee the trading team on-site.

At noon, the stock exchange takes a lunch break and trading ceases.

At 12:10, Dai Shi arrived at Lin Haoran's office with several sheets of A4 paper.

"Boss, we've lived up to expectations! We've completed the task you assigned, and even exceeded them!" Dai Shi handed the A4 paper to Lin Haoran with an excited expression.

"Thank you for your hard work." Lin Haoran smiled as he took the document and began to read it.

"Huifeng Bank: 10.26% acquired, HK$1.52 million spent. Galaxy Securities now holds a total of 26.47% of Huifeng Bank's shares, with a total expenditure of HK$6.53 million." "Hang Seng Bank: 12.12% acquired, HK$1.25 million spent. Galaxy Securities now holds a total of 20.4% of Hang Seng Bank's shares, with a total expenditure of HK$2.82 million."

"Hutchison Whampoa acquired 4.87% and spent HK$1.85 million. Currently, Galaxy Securities holds a total of 10.59% of Hutchison Whampoa's shares and has spent a total of HK$3.92 million."

……

The data is listed clearly, row by row.

In particular, Huifeng Bank has already achieved its target of 25.6%, and even slightly exceeded it.

"We don't need to acquire any more shares of Huifeng Bank for now," Lin Haoran said with satisfaction.

The cost of acquiring these stocks was so low that even Lin Haoran found it outrageous.

At the same time, he also truly felt the influence of Huifeng Bank in Hong Kong.

When Huifeng Bank encountered difficulties, it had such a huge impact on the entire Hong Kong.

So many giants have been implicated because of Huifeng Bank.

No wonder they were the former overlords of Hong Kong!
Given the current situation, after Standard Chartered Bank successfully acquired HSBC, HSBC's major partners, especially those British corporate giants, will likely shift their cooperation targets from HSBC to Standard Chartered Bank. Therefore, even if HSBC's share price rises in the future, the increase will be limited.

Therefore, there is not much need to absorb too much; enough to return to the shareholders is sufficient.

It's likely that those who lent him the shares are now filled with regret. Under these special circumstances, their shares have already been lent out, and they have no way to demand that Lin Haoran return them before the contract expires.

In other words, even if Huifeng Bank were to actually go bankrupt, these original shareholders of Huifeng Bank would only be able to watch helplessly as their interests were harmed.

“Yes, boss, I will stop acquiring shares of Huifeng Bank this afternoon,” Dai Shi said respectfully.

"How come Hengsheng Bank's stock acquisition is happening so quickly?" Lin Haoran said, looking at Hengsheng Bank's data with some surprise.

Hang Seng Bank absorbed a whopping 12.12% of its shares this morning. It's worth noting that Huifeng Bank holds 62.14% of Hang Seng Bank's shares.

The founder, He Shanheng, had already sold all his shares in Hengsheng Bank.

Even so, there are still several major shareholders. In other words, even without these major shareholders, Hengsheng Bank's shares are only 37.86%.

However, in just two days, Galaxy Securities has acquired a whopping 20.4% stake in Hengsheng Bank.

This seemed a bit outrageous to Lin Haoran.

"Boss, it seems that a large number of shareholders of Huifeng Bank are selling off their shares, and with other investors also selling off their shares, there are a lot of low-priced orders for Hang Seng Bank's stock. However, no one is buying Hang Seng Bank's stock, so we were able to get a bargain. Seeing so many orders for Hang Seng Bank, I had the traders keep buying them," Dai Shi reported.

Lin Haoran nodded upon hearing this.

The shareholders of Hengsheng Bank are definitely the most unlucky, having been dragged down by Huifeng Bank.

Hang Seng Bank's operations are actually quite good, and its reputation in Hong Kong has always been excellent. So even with the financial drain from HSBC, it is still able to remain the second largest bank, and many Chinese people are keen to deposit their funds in Hang Seng Bank.

As a subsidiary of Huifeng Bank, when Huifeng Bank encountered a crisis, Huifeng Bank immediately tried to withdraw a large amount of funds from Hengsheng Bank.

This led to a situation where, when Huifeng Bank encountered a cash flow crisis, its subsidiary Hengsheng Bank also experienced a cash flow crisis.

With a 62.14% stake, Huifeng Bank wanted to do this, and the other shareholders of Hengsheng Bank had no right to object.

Therefore, all branches of Hengsheng Bank, like Huifeng Bank, have temporarily closed and ceased operations.

Under these circumstances, it is not difficult to understand why Hengsheng Bank's stock was sold off on a large scale.

In particular, Hengsheng Bank's position is awkward. As a subsidiary of Huifeng Bank, many people believe that Huifeng Bank still has a chance to be saved, but Hengsheng Bank is not so sure.

Nowadays, most people's attention is focused on Huifeng Bank. As a subsidiary, Hengsheng Bank's fate seems to be shrouded in a heavy shadow, and few people are paying attention to where it will go next.

Stockholders were only concerned with selling their shares in a panic, as if every second they held on would result in greater losses.

Lin Haoran sat in his office, tapping his fingers lightly on the desk, and then said, "Dai Shi, do you think it's possible that Huifeng Bank is also selling off Hengsheng Bank's shares?"

“Boss, I don’t think it’s Huifeng Bank!” Dai Shi shook his head and said.

"Oh? What are your thoughts?" Lin Haoran asked with a smile.

"First of all, it is well known that Huifeng Bank holds shares in many companies, such as giants like Swire and Wheelock. Now, these companies have successively announced that they will no longer cooperate with Huifeng Bank."

Therefore, it's practically pointless for Huifeng Bank to retain shares in these companies. So, even if they were to sell their shares, they would most likely prioritize selling shares in these companies.

Conversely, the future of Huifeng Bank hinges on the stock of Hengsheng Bank. If Huifeng Bank still has a chance to be salvaged, and Hengsheng Bank remains under its control, then Huifeng Bank's future strength should not be underestimated.

Therefore, they wouldn't easily sell Hengsheng Bank's stock unless they were absolutely forced into a corner. "Boss, this is just my personal opinion; please don't blame me if I'm wrong," Dai Shi said confidently.

"That makes sense, Dai Shi. I never expected you to have such a brilliant insight!" Lin Haoran laughed heartily.

Lin Haoran completely agreed with Dai Shi's words.

"Let's go grab a bite to eat. You've worked hard too, and we'll have to keep fighting this afternoon!" Lin Haoran stood up, patted Dai Shi on the shoulder, and said.

"Boss, this is my job, it's no trouble at all," Dai Shi said, somewhat flattered.

The two went to the canteen of the Kang Le Building together and had lunch there.

In the afternoon, the stock market remained gloomy.

The mood of stock market investors is as heavy and anxious as the oppressive weather.

An indescribable tension permeated the trading hall, with worry and unease etched on everyone's face.

Meanwhile, all employees of Galaxy Securities have returned to their posts.

Although Galaxy Securities no longer acquires shares of Huafeng Bank, its traders continue to acquire shares of business giants such as Hengsheng Bank, Cheung Kong Holdings, Hutchison Whampoa, Swire Pacific, and CLP Power.

Therefore, the entire office remained as busy as it had been in the morning.

For Lin Haoran, he doesn't mind having too many stocks of giants like Cheung Kong Holdings, Hutchison Whampoa, and Swire Group!

In any case, these companies were only dragged down by Huifeng Bank, which caused temporary problems with their cash flow. In reality, their internal operations were very healthy.

It's fair to say that with such low prices now, the more he buys, the more he earns.

Since that's the case, he naturally absorbs as much as he can.

He naturally didn't bother with penny stocks like Jianing Group.

He doesn't want shares in companies that appear to be the most powerful.

For a company like Jianing Group, which is on the verge of bankruptcy, to still take in new members is truly courting disaster.

Now that he had already bought back the shares of Huifeng Bank, Lin Haoran naturally didn't need to stay at Galaxy Securities in the afternoon.

For him, the shares of Huifeng Bank he held were enough to repay the shareholders who lent him the shares, and the most basic goal had been achieved.

After that, acquiring other shares at low prices was already a pleasant surprise.

Lin Haoran made a specific estimate: Previously, he borrowed 25.6% of Huifeng Bank's shares and sold them, obtaining as much as HK$60.1 billion. Now, he has only used HK$6.53 million to purchase 26.47% of the bank's shares.

This means that even if he returns 25.6% of the shares to his creditors, he can still net HK$53.57 billion from this short-selling scheme.

Even after deducting handling fees, Citibank commissions, and other expenses, his final profit still exceeded HK$53 billion!
An investment of over HK$600 million yielded a sale of HK$60.1 billion, resulting in a profit of HK$53 billion. Such a return rate is simply astonishing and unbelievable.

After roughly estimating the rate of return, even Lin Haoran was shocked by his own plan.

This return rate of 883% would be enough to shock the global financial world if it were to get out.

Of course, Lin Haoran wouldn't release the specific data; there was no need.

Although everyone already knew he was shorting Huifeng Bank, the amount he invested and how much he earned were impossible for outsiders to know unless he made a public announcement.

Hongkong Land Group, President's Office.

Lin Haoran and Ma Shimin chatted about the development of the Hongkong Land Group in the office, occasionally bursting into hearty laughter. At this moment, the two seemed completely unaffected by anything related to the financial industry outside the industry.

Hongkong Land Group had already transferred its funds to Bank of East Asia, so it naturally wouldn't experience cash flow problems like Hutchison Whampoa and Swire Properties, whose working capital was held in Huafeng Bank.

Therefore, today's Hongkong Land Group is completely unaffected by external factors.

If Hongkong Land Group hadn't been delisted and privatized early on, its share price would probably be an astonishing figure today. In short, a market capitalization of over HK$30 billion would be entirely achievable.

As for Hong Kong Electric Group, another giant under Lin Haoran's control, it took over the top spot after Huafeng Bank fell from its position, becoming the company with the highest market value in Hong Kong.

Today, the market capitalization of HK Electric Holdings Limited has exceeded HK$20 billion, reaching a staggering HK$223 billion.

Companies like Hong Kong Electric Holdings, Hong Kong and China Gas, and Hong Kong Telephone, which Lin Haoran did not privatize, are now quite unusual in the Hong Kong stock market.

Other stocks in the top 50 were all affected by Huifeng Bank to varying degrees, resulting in a sharp drop in their share prices.

However, Lin Haoran's companies, having already transferred their financial businesses from Huifeng Bank, were not affected at all. On the contrary, because Lin Haoran was their backer, their stock prices continued to rise, and they all entered the top ten.

(End of this chapter)