Hong Kong Island: From a small stall to a global supplier

Chapter 372 The Ox That Died from Exhaustion
The Wang brothers' laughter was so wicked that Bisina couldn't stand it and leaned back, saying, "Hey, you guys aren't up to something again, are you? Trying to rob HSBC?"

"What are you saying? We are legitimate businessmen, okay? What robbery? That's going too far!" Wang Yaotang said seriously.

Bissina scoffed. The $2300 million hadn't even been touched yet, and he'd been involved in all sorts of things, from the tens of millions of Hong Kong dollars he'd robbed before.

"What Brother Yao means is that robbery is too slow to make money, high-risk, and low-return, so it's really not worth considering," Awei explained.

"Hey, hey, hey, what do you mean by looking down on it? I simply wouldn't stoop to doing it."

"Robbery is slow?" Bisna looked at the group with disdain. $2300 million was her job success. Regardless of whether she could spend it now, it was her greatest achievement, and she wouldn't allow anyone to belittle it.

"It is indeed a bit slow." Wang Yaotang said with a smile, "You really have to believe me. I didn't know much about finance before. Do you know why so many big companies, even though they have money on hand, still need to take out loans, and the more they borrow, the more they take out?"

“Isn’t it to accelerate the company’s development?” Bissina replied.

"That's certainly one reason, but it's not the only one. There are many other financing options besides loans, such as going public, issuing new shares, or attracting other investors. Loans are not the only option. The main reasons are to combat inflation and avoid taxes."

Wang Yaotang said with a smile, "The Hong Kong Association of Banks publishes HIBOR (Hong Kong Dollar Interbank Offered Rate) and HONIA (Hong Kong Dollar Overnight Average Index) daily. Loan interest rates are usually based on HIBOR/HONIA with a 'minus', which applies to loans mainly in Hong Kong dollars."

"For dollar loans, the interest rate will be referenced to SOFR (US Overnight Secured Funding Rate) or LIBOR (London Interbank Offered Rate)."

"For a specific explanation, you can ask the company's finance department or lawyer. I'll just tell you the results directly: Hong Kong dollar loans are 3.6%-4.0% for short-term and 4.0%-4.6% for medium- to long-term; US dollar loans are 5.0%-5.2% for short-term and 5.3%-5.5% for medium- to long-term. But do you know what Hong Kong's inflation rate has been in recent years?"

“Let me tell you, the inflation rate was 13.5% in 1980, 11.3% in 81, and 9.6% in 82. In other words, inflation was higher than the loan rate, so of course you had to take out a loan.”

“Fixed assets themselves appreciate in value during inflation,” Bisina countered.

“Appreciation and depreciation are not opposites; they happen simultaneously,” Wang Yaotang explained, then waved his hand, “Old monk, I really suggest that instead of studying finance, you should go and fire a few shots to keep your skills sharp.”

"You're calling me stupid!" Bisina gritted her teeth.

Wang Yaotang suppressed a laugh, "No, Four-Eyes is very envious of a muscular physique. He can solve problems with his hands. Who wants to use their brain? It's only out of necessity. Primitive people learned to use tools because they couldn't beat others."

Why do I feel like you're insulting me?

……

Wang Yaotang has always prided himself on being an action-oriented person. Once he sets the tone, he immediately begins to act. He didn't really have much contact with HSBC before, but Hong Kong is so small that it's easy to get to know a few people.

I called Mr. Bao and went to his house in the afternoon. He told me about the current situation at HSBC, and in one word, chaos!

Shen Bi's death was too sudden and too abrupt, leaving behind not only a power vacuum but also a huge mess.

Even Wang Yaotang was astonished by some of the biggest ones, the first being the financing of the Hong Kong MTR Island Line.

In 82, the existing MTR system, including the Kwun Tong Line and Tsuen Wan Line, reached capacity, necessitating the expansion of the Island Line (connecting Sheung Wan to Chai Wan) to alleviate traffic congestion. The project, with a total investment of approximately HK$200 billion, was one of the largest infrastructure financing projects in Hong Kong's history.

The entire MTR line financing project was spearheaded by Sir Michael Sandberg. HSBC, as Hong Kong's note-issuing bank and largest lending bank, led the formation of a syndicated loan, with HSBC underwriting approximately 30% of the loan. It also coordinated with local banks such as Standard Chartered and Bank of East Asia to participate, promoting the adoption of the "BOT" model in Hong Kong, allowing private and foreign capital to participate, reducing the government's financial pressure, providing long-term low-interest loans, and ensuring the stability of the project's funding chain.

Now that Sir Michael Sandberg has suddenly passed away, no one in Hong Kong has the influence to control Standard Chartered Bank, Bank of East Asia, and other banks. Although the project has not stopped, chaos has begun to emerge. The HK$200 billion long-term loan was not invested all at once, but in installments over several years. The interest rates were different at different times, and the amount of funds available from each bank also varied. With such a large amount of money, even a difference of 0.01 percentage points is huge.

The problem is that there's more than just this one large project.

If Gao Lishi could recognize the problem, the Hong Kong British government and the bigwigs above him certainly could too, and they took action.

The East District undersea tunnel and the new airport are already in the planning stages, including the supporting railway express line. The most critical financing issue is still being led by Shen Bi.

HSBC, officially known as The Hongkong and Shanghai Banking Corporation, primarily engaged in international money exchange, issuing banknotes, deposit and loan services, handling and issuing foreign debt to the Chinese government, and managing China's customs and salt taxes before 45.

Shen Bi had just spearheaded the opening of the first branch of HSBC in China in Shenzhen, focusing on serving processing trade and joint ventures. Wang Yaotang's garment factory in Shenzhen used HSBC for many of its accounts.

In addition, this year, Sir Michael Sandberg spearheaded HSBC's transformation from "separate business operations" to "mixed business operations," expanding into high-value-added businesses such as investment banking and wealth management. He was in talks to acquire Hong Kong's "Ho Po Securities" to enter the stock underwriting and brokerage business. If he hadn't been ousted by Wang Yaotang, "Ho Po Securities" would have been renamed "HSBC Bonds" immediately.

Also in negotiations is "Hong Kong Trust Company Limited," which aims to expand its family trust and asset management services...

The above covers the main business of banks. In addition, as the "issuing bank" of the Hong Kong dollar, HSBC is also the "cornerstone of Hong Kong's financial system." Currently, bilateral negotiations are still undecided, international capital's confidence in Hong Kong is fluctuating, the Hong Kong dollar is being sold off, the stock market is falling, the real estate market is entering a downturn, and capital is flowing out. Without Sir Michael Sandberg as a stabilizing force, confidence among all parties has been further eroded, and the Hong Kong dollar, Hong Kong stocks, land, and real estate have all fallen further in recent days…

Paul Smith was indeed a talented individual. Historically, he succeeded Sir Michael Sandberg as chairman of HSBC after Sandberg's retirement in 86 and did a very successful job. But now...

Neither he nor Eldon can hold things together; the situation is beyond chaotic.

Although Mr. Bao did not serve as a director of HSBC, he was already one of the world's largest shipping magnates in the 70s, owning more than 200 ships with a total tonnage of over 2000 million tons. His voyages covered ports all over the world, and all of them involved cross-border settlements and foreign exchange. He had close relationships with various banks and was extremely knowledgeable about the ins and outs of the industry.

He explained the current situation of HSBC to Wang Yaotang, a promising junior colleague, and recommended Liu Jianyi for cooperation regarding loan issues.

Liu Jianyi: Female, a Hong Kong native, joined HSBC in the 70s. She is familiar with the business environment in both Hong Kong and mainland China. Currently, she is leading the credit support for Hong Kong's manufacturing industry (such as textiles and electronics) and Chinese-funded processing enterprises, and designing products such as "accounts receivable financing" and "letter of credit packing loan".

Wang Yaotang's Hongdou Apparel and Yaoguang Audio are in the textile and electronics industries, respectively. He also does processing of supplied materials in the north, so the business is a perfect match. As for Tiansheng Entertainment, although it doesn't own any property, it perfectly corresponds to 'accounts receivable financing' and 'letter of credit packaged loans'. There is no one more suitable than her.

Given the current situation, several directors, including Pu Weishi and David Clayton, are preoccupied with matters at hand. If Wang Yaotang were to go over there, he might end up getting dragged into a vortex of projects involving the subway, undersea tunnel, and new airport.

Although Wang Yaotang has taken control of the stone market, he is a newcomer to the construction industry. His only capital is in the stone industry. If he is dragged into it, he will not only be ripped off, but his energy will also be tied up, which will affect his development. It would be better for him to follow his own pace.

Whether it's a subway, an undersea tunnel, or an airport, stone is always needed, and Wang Yaotang has the opportunity to join in at any time.

Listening to advice is always beneficial, especially when it comes from a tycoon like Mr. Bao, who has been influential on the international stage for decades. Wang Yaotang was bound to listen attentively.

In Wang Yaotang's view, among the top ten richest people in Hong Kong, he respects Mr. Fok the most and admires Mr. Bao the most. Mr. Bao is a world shipping magnate who made his way up on the global stage. His reputation and strength are equal, while Mr. Li, Banana, the Guo family, and the Zheng family all used Hong Kong as a platform. They can only be considered as bullies within their own territory. They may have made more money than Mr. Bao, but their strength and reputation are too superficial.

Conca's income is among the top five in the world, but the Chinese Super League King and the World King are both Kings, so what's the comparison?
Mr. Bao, ever the good Samaritan, called and arranged a meeting with Liu Jianyi. After chatting at the dinner table, Liu Jianyi readily agreed with a smile, thanking Mr. Bao for taking care of her. She had also been significantly affected by the recent internal turmoil at HSBC, and having this loan deal in hand gave her a trump card.

After thanking Mr. Bao, Liu Jianyi raised her glass to Wang Yaotang again, saying, "Mr. Wang, you're a little money god in the financial world now. I don't know how many people want to get on your good side. Before, everyone in the industry speculated that you would go to Standard Chartered for cooperation. People at Standard Chartered have been bragging about it a lot in private. I never dared to dream that this cooperation would fall to me. When I get back, I'll have to show off properly and see how envious and jealous those people at Standard Chartered are."

"Wow, is it really that exaggerated? Sister Liu, I believe you now." This indirect flattery is far more sophisticated than the likes of Gao Lishi; it makes one feel smug without being envious of Meisu. Wang Yaotang couldn't suppress the smirk on his face.

After clinking glasses and taking a sip, Liu Jianyi said with a smile, "It's not an exaggeration at all. For us in finance, what we care about most isn't old-school tycoons like Mr. Bao. They've had mature and stable partners for decades, and they're untouchable, right, Mr. Bao?"

Old Bao laughed heartily, "That depends on whether you're willing to spend a lot of money."

“I would like to, but the company won’t allow it.” Liu Jianyi shook her head with a regretful look and continued, “Yaotang, you are different. You have risen rapidly, you don’t have any long-term partners, and your business is in a period of rapid growth. You have a huge need for funds, making you the best client for us. In the last 10 years, Yaotang, you have been the most dazzling one in Hong Kong and even the whole Southeast Asia.”

"Is that so? I have no idea. No one in the financial industry has contacted me. I only asked Mr. Bao for help because I couldn't find any other loan channels." This was the first time Wang Yaotang had heard this, and he found it very unbelievable.

“You’ve risen so fast! I just felt like I was qualified to approach you, but I hadn’t even gotten the hang of it yet, and you’ve already taken another step forward. Besides, Yaotang, all the businesses you own are cash cows. You’ve hardly ever had to worry about funding. Plus, you got a lot of cash from the two tournaments. Nobody else can find an opportunity.” Liu Jianyi explained with a smile, “That’s why I said that once people outside find out that I’m cooperating with you, they’ll be insanely jealous.”

Wang Yaotang smiled broadly. He had heard plenty of flattery from people in the underworld, so it was nothing new. He never expected to be so popular in the financial world without his knowledge... Wow, that's great!

No wonder he works in finance, he has a great eye for people!

“In the last decade, the most sought-after were Mr. Li Xiangjiao, Mr. Li Zhaoji, and Mr. Guo Desheng. In this decade, it seems that you are the only one with the best chance of catching up with the top ten richest people.” Liu Jianyi smiled and raised her glass again. “I would like to toast the future top ten richest people. At that time, I can also tell others that I, Liu Jianyi, also contributed to the process of the Little God of Wealth climbing to the top of the Hong Kong Rich List.”

"Sister Liu, you're too kind, too kind," Wang Yaotang said with a smile, bumping into her again.

He usually prides himself on his eloquence, saying he can talk the dead back to life, but compared to Liu Jianyi today, he immediately falls short. Wang Yaotang really feels good about this flattery!
After finishing the meal, Wang Yaotang personally went downstairs to see Liu Jianyi off and then drove Mr. Bao home. Only then did he go home. Sitting in his car, reflecting on the dinner, he felt like he had been manipulated. Judging from Liu Jianyi's words, he was so popular in the financial circle that if he pulled some strings, he might be able to get better funding and terms...

However, Wang Yaotang did not have any intention of going back on his word. Although this person was a woman and he had never heard of her in later generations, she was very magnanimous in her words and deeds and did not hide anything from beginning to end, which made him feel very good about her.

There will be many financial collaborations in the future, and the amounts will be substantial. Obviously, having a similar work style and temperament is more important.

The next day, he told Four-Eyes about the matter. He would have to go there to handle the business later. The specific shares to be mortgaged and their valuation needed to be discussed. Wang Yaotang was not naive enough to think that Liu Jianyi would completely side with him during the loan process just because she was flattering him.

Especially during this sensitive period for HSBC, countless people are watching closely.

The four-eyed guy breathed a sigh of relief. "I'm finally free from this dilemma. You have no idea how much trouble I've been getting lately. I get more than a dozen invitations every day, all from senior executives of big banks. They talk about billions or billions of dollars, using all sorts of financial jargon that are driving me crazy. Damn it, I can't tell who's right. If I don't get a result soon, I'm afraid I'll be scammed by them sooner or later."

"Wait a minute." Wang Yaotang put down his chopsticks, looking at the bespectacled guy with a speechless expression. "A dozen invitations every day?"

"Wow, no wonder you've been either not coming home at night lately, or coming home really late, and you always look so listless. You've been cheating the brothers on us!" A-Jie shouted in condemnation.

"Ah Xiang, that's so unfair of you." Ah Ji tilted his head and looked over as well.

Awei shrank back slightly, pretending not to exist.

"I'd heard that the most shady players are in the finance industry, like Russian roulette and depth charges. You didn't even bring the brothers along. I told you, no one who wears glasses is a good person!" A-Jie said bitterly.

"There's no such thing as eating alone. You guys can have whatever you want at nightclubs every day. You look down on this kind of thing, so I didn't call you. Besides, what would I call you for? Do you even understand what 'accounts receivable financing' and 'letter of credit packaged loan' mean?" the four-eyed guy said irritably.

"Stop making excuses, I see through you, you're disloyal." Ah Jie waved his hand.

The bespectacled guy rolled his eyes.

"Ahem, well, what does 'Russian Roulette' mean?" Wang Yaotang tapped the table and asked, "I'm not very knowledgeable, I've never heard of it. And what does 'depth charge' mean? I'm so worried about everything that I don't even have time to rest, and you guys are playing such fancy games behind the scenes!"

"No, I didn't, I practice boxing," Aji hurriedly denied.

“I heard it from someone else.” A-Jie turned his head away.

"Brother Yao, a message came from the north asking how things are going with the switchboard." Awei said with a smile, changing the subject.

"Exchange? I want to exchange with you right now," Wang Yaotang cursed. "I'd completely forgotten about it if you hadn't brought it up."

"Hey, you asked me to gather information about the Jialing Group, and now I've got some leads," the bespectacled guy added.

"By the way, did you mention before that the security company is recruiting another 100 people with military experience? It's all settled. Why don't you go and meet them?" Aji added fuel to the fire.

"The entertainment company talked to me. Although the company is very profitable, its development has stagnated. They feel that the profits are too high and the taxes are too high. They want to take advantage of the current real estate downturn to use the profits to acquire the property where the nightclub is located, kick out the original landlord, and increase their share and assets," A-Jie said seriously after coughing with his hand over his mouth.

"You sons of bitches!" Wang Yaotang glared at the four brothers, "Fine, fine, so this is how you play it!"

Ah Jie gave a thumbs up, "You're the big brother!"

Awei raised his right hand, shouting, "The Sky-Supporting White Jade Pillar!"

Aji chimed in, "A purple-gold beam spanning the sea!"

The bespectacled guy concluded, "The capable should do more!"

"Screw you!" Wang Yaotang grabbed the shrimp dumplings and threw them one by one.

(End of this chapter)