My Realistic Simulation Game

Chapter 105 The Second Punch Has Been Thrown
When Qin Yuan uttered the words "the article will be published," Fang Minghai instantly understood Qin Yuan's entire plan!

Public opinion explodes!

This manifesto exposing the eight major frauds of Deepfield should be made public through Hong Kong media!

Leveraging the relatively free and extensive reach of Hong Kong's media, this bombshell was dropped on the entire city of Shenzhen and even the whole country!
The resulting media frenzy and market panic would be enough to instantly destroy Deepfield's stock price, which was built on quicksand!
Moreover, choosing to publish in Hong Kong Island will have a greater impact, and the resulting sensation and panic will only be more intense as it spreads back to Shenzhen!
"Alright! Brother Qin! Leave this to me!" Fang Minghai agreed without hesitation, patting his chest. His eyes gleamed with excitement. "In Hong Kong, it's hard to get a spot in top newspapers like Ming Pao and Sing Tao Daily, but I can definitely get you a spot in the financial sections of Tin Tin Daily News and Hong Kong Commercial Daily. I guarantee it will be published!"

After saying that, he picked up the few sheets of paper that Qin Yuan handed him, carefully stuffed them into his briefcase, and then turned around and hurriedly left the room with Lin Shishan.

He wasn't just trying to gain a favor from Qin Yuan; he also wanted to witness firsthand this earth-shattering drama that was about to unfold and would be recorded in the history of China's capital market!

The domestic exchange has only just been established, and such a large-scale fraud case has already been exposed. It's too exciting!
Qin Yuan was somewhat surprised by Fang Minghai's impetuous nature; the image of the refined and shrewd Hong Kong businessman he had first met seemed to have faded considerably.

However, this is exactly the kind of efficiency Qin Yuan needs.

Fang Minghai has his battlefield, and Qin Yuan in Shenzhen also has his own plans that he must complete.

Short selling is not simply about releasing negative news to suppress stock prices.

The most crucial step is to acquire the chips!
In 1990, when financial products were scarce and market rules were still in their infancy, the most direct and almost only feasible way to short a stock was through securities lending!

Shortly after Fang Minghai left, he took Magan'er and Markov and went to the securities department of Bank of China, Shenzhen Special Securities Company, Shenzhen Guotou (the predecessor of Guoxin Securities) and China Merchants Securities.

The first three companies showed no interest in Qin Yuan's proposal and were turned away.

In the early stages of capital market liberalization, these state-owned securities companies were relatively conservative and unwilling to take risks.

Qin Yuan wasn't surprised; he would have been more surprised if these large state-owned factories had taken such big steps.

After being turned away three times in a row, Ma Gan'er was a little discouraged. He wiped the sweat from his forehead and said worriedly, "Brother Yuan, we've been to three companies, and none of them are willing to lend us shares. Is there any hope for China Merchants Bank?"

Qin Yuan's gaze was calm, but his tone was firm: "The first two are state-owned enterprises in Shenzhen, closely tied to the Shenzhen Stock Exchange, so their caution and conservatism are to be expected. But China Merchants Securities is different."

He looked at the brand-new building with the "China Merchants Securities" sign not far away, where the flow of people was noticeably denser than in other places.

"China Merchants Securities' parent company is China Merchants Group, headquartered in Hong Kong Island. Many of the people working here have experience in Hong Kong Island, and their understanding of international financial markets and derivatives is far superior to that of the previous two companies. They will be much more receptive to our needs."

Qin Yuan had a clear understanding of this point.

The reason why China Merchants Group, Huaru Group, Baoli Group, and Xiaxin Group, these famous conglomerates, were able to stand out in the future is that they dared to be pioneers and were good at seizing the opportunities given by the times.

Now, what Qin Yuan is offering is an opportunity to seize the initiative in the field of financial innovation!
Moreover, and most importantly: China Merchants Securities is a newly established securities company!
They urgently need to quickly establish a foothold and build their brand in the highly competitive Shenzhen market!

A large-scale securities lending transaction with innovative operations could undoubtedly become a highlight of their business expansion!
At this moment, the China Merchants Securities branch was bustling with activity, packed with people.

Everyone knew that the Shenzhen Stock Exchange would begin trial operations on December 1st and that Jianlibao's IPO was imminent, so the five old stocks were bound to see a new round of explosive growth! Investors flocked in like a tide, scrambling to buy shares at the last minute.

It took Qin Yuan and his two companions a great deal of effort to squeeze to the counter.

Unlike others who rushed to fill out forms to buy stocks, he directly took out a bank draft for one million yuan and calmly said to the teller:
"I'd like to speak with your securities manager."

A bill of exchange for one million!
In the Shenzhen stock market at the beginning of 1990, this was an absolutely staggering sum of money!

The counter staff dared not neglect the matter and immediately called the manager.

"Mr. Qin? It's a pleasure to meet you! My surname is Huang, Huang Tiancheng."

A middle-aged man in a sharp suit and gold-rimmed glasses, exuding a capable air, quickly approached Qin Yuan, warmly shook hands with him, and invited him into the private office inside.

He smiled and said, "I don't know which stock Mr. Qin wants to buy. Our China Merchants Securities is very powerful. Apart from Jianlibao, which has not yet been issued, we have all five of the old stocks."

Qin Yuan sat down and got straight to the point: "Your company is very powerful and has channels with all five major shareholders. However, I am not here today to buy stocks."

Huang Tiancheng's smile remained unchanged, but his eyes held a hint of professional inquiry: "Oh? So, Mr. Qin's meaning is...?" "I want to short-sell securities," Qin Yuan clearly uttered the two words.

"Securities lending?" Huang Tiancheng's smile froze slightly, and his gaze behind his gold-rimmed glasses instantly sharpened!

Before becoming the general manager of China Merchants Securities, he worked for many years at a well-known securities company in Hong Kong, and was very familiar with "securities lending," a mature financial instrument!

The essence of securities lending is that investors expect stock prices to fall in the future, so they borrow stocks from securities firms to sell, and then buy back the stocks after the stock price falls to return them, thus profiting from the price difference!
In the current frenzied atmosphere of the Shenzhen stock market, where it's booming and everyone firmly believes it will rise even higher tomorrow, someone actually wants to short sell shares?!
This is absolutely going against the tide!

Huang Tiancheng's brain was working at lightning speed, assessing the risks and possibilities.

Firstly, at the policy level, there is no explicit permission for securities lending, but there is also no prohibition!
Shenzhen Special Economic Zone is a testing ground for reform, and financial innovation is an essential part of it.

Or perhaps the regulatory authorities above are not even aware that such operations exist!

Currently, most of the five stocks held by China Merchants Securities are held on behalf of clients and are not owned by the company itself.

However, as long as the client agreement allows it or makes it ambiguous, the securities lending business itself is technically feasible!

The key lies in risk control and profit!
Huang Tiancheng looked at Mr. Qin in front of him. He made a move with a million-dollar bill of exchange and his demeanor was calm and composed. He was obviously not an ordinary person!

He dares to short sell at this time, he must have something to rely on!

Huang Tiancheng took a deep breath, suppressing the turmoil in his heart, and cautiously asked, "Mr. Qin, how much stock do you want to borrow? Which specific stocks are you interested in?"

“Three million.” Qin Yuan announced a number, his tone calm but carrying an undeniable weight. “The specific distribution ratio is 60% for Yuanye, 20% for Anda, 10% for Vanke, and 5% each for Jintian and Shenzhen Development Bank.”

Huang Tiancheng quickly calculated in his mind: 60% of the land is open! 180 million!
This is almost headed towards the open fields!

China Merchants Securities happens to have a large number of Yuanye shares entrusted by clients, which have relatively good liquidity.

If this deal goes through, the fees and interest will be quite substantial!
"How long does Mr. Qin plan to short the securities?" Huang Tiancheng pressed.

"Half a month," Qin Yuan answered crisply.

Half a month!
Huang Tiancheng's last lingering concern was dispelled.

In the current market with its one-sided upward trend, the risk is relatively controllable within half a month!

Even if the stock price doesn't fall, or even rises slightly, the margin ratio of China Merchants Securities, plus the collateral provided by Qin Yuan, would be sufficient to cover the risks.

The lure of huge profits and the impulse for financial innovation ultimately overwhelmed Huang Tiancheng's doubts and anxieties.

A professional smile returned to his face as he extended his hand:
"Mr. Qin, we understand your needs."

"China Merchants Securities has always been committed to providing diversified financial services to its clients. Although securities lending is still a relatively new concept in mainland China, we are willing to make beneficial attempts under the premise of controllable risks. Please wait a moment, I will have someone prepare the contract!"

Qin Yuan looked at Huang Tiancheng's outstretched hand, a subtle smile curving his lips.

While short selling indicates a bearish view on a particular stock, it can promote stock circulation, facilitate price discovery, stabilize the market, and identify risks. Therefore, although short selling may not be permitted in various countries, short selling is generally allowed.

Because the scale of securities lending is relatively small, its impact on the market is limited.

For Qin Yuan, this was almost equivalent to short selling.

Because he did not expect to gain much wealth from the wilderness.

He's going to crush the wilderness and destroy this fraud ring!

And to confirm a certain guess I had in mind!
Next, we just have to wait for Fang Minghai to ignite that fire in Hong Kong, and... for the Shenzhen regulatory authorities to take swift and decisive action!

(End of this chapter)