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Chapter 277 Fires the First Shot in Harvesting South Korea

The air in the office seemed to smell of money. Jane Fraser tapped her finger lightly on the mahogany desk and dialed an internal line.

The phone had barely been hung up when hurried footsteps sounded outside the door, and the secretary walked in carrying documents.

Jane Fraser raised her chin, and the secretary, understanding her meaning, handed the documents to Ernst with both hands.

"Our profits in South Korea are almost at the three-hundred-million-dollar mark." Jane Fraser's voice carried a hint of barely perceptible amusement, like a hunter seeing its prey step into a trap. "But you know, this isn't the limit yet. Nobody can say for sure what the final profit will be."

Ernst flipped open the document cover with his fingertips, and Jane Fraser added, "The exchange rate of the Korean won to the US dollar has now fallen to 1598 won to one dollar. Do you remember the exchange rate when we entered the market in August? It was 889 won to one dollar. This drop has wiped out more than 80% of that. It's more thrilling than a roller coaster."

She pointed to the document Ernst was opening, the pages filled with dense numbers and charts, detailing the recent hedging strategy against the South Korean market. Each piece of data was like a precise bullet, aimed at the weak points of the South Korean financial market.

"In our judgment, this decline has not yet bottomed out," Jane Fraser said with a certainty.

"It might break through the 1700 won to one US dollar mark in the end, and I wouldn't be surprised if it falls below 1800 won. The current situation in the South Korean market is more difficult to control than a wild horse without a leash."

"The hedging department's forecast is quite optimistic," she said, her eyes sparkling with excitement. "This time in the Korean financial market, we can earn at least $3.5 million. If we're lucky, we might even break $4 million."

Ernst looked down and carefully flipped through the report. The pages were full of Ernst Asset Management's strategic decisions in South Korea, like a sharp knife precisely inserted into the two key tracks of the foreign exchange and futures markets.

The more he looked, the more his brows furrowed, not because he was worried about the profits, but because he was calculating the next move in the game.

"What's going on on Wall Street?" Ernst closed the file, his sharp eyes seeming to see through the every move of those Wall Street financial giants.

Jane Fraser couldn't help but scoff upon hearing this. "What new tricks can they come up with? A bunch of people are busy stockpiling ammunition, just waiting for the South Korean financial market to fully open so they can rush in and make their move, wishing they could swallow the entire South Korean financial market whole."

She leaned forward and lowered her voice, "By the middle of next year, South Korea must open its financial market as agreed. Right now, all the capital is like sharks smelling blood, flocking to South Korea to do market research."

"They're just waiting for the door to open so they can immediately start throwing money at acquiring banks and securities companies. I estimate they'll be able to swallow up more than half of South Korea's financial assets. Those guys have never been so greedy."

Ernst was not surprised at all after hearing this.

Those people on Wall Street made their fortunes playing the capital game. If you asked them to run a real business, they probably wouldn't even understand how a production line works.

But when it comes to playing the financial game and using financial means to control the real economy, they are the masters, capable of playing various capital games in a way that is more dazzling than a magician's.

"And what about us?" Ernst instantly perked up, his eyes lighting up, radiating an eagerness. "How many assets can we mobilize now?"

Jane Fraser knew from his expression that he was about to do something else.

Without a second thought, she stated the figure: "Right now, mobilizing two or three billion US dollars is no problem at all."

"If we had more time, we could clear out some of our assets and raise a hundred or eighty billion US dollars."

However, I don't think it's necessary to make such a big fuss. Not only will it attract too much attention, but it will also cause internal instability.

Ernst knew perfectly well that the hundreds of billions of dollars Jane Fraser mentioned was a figure that could only be reached by clearing out all her assets and borrowing money.

However, there is no need for that at all. Two billion US dollars is enough to make waves in the South Korean market. There is no need to stake all our resources.

"Since Wall Street is going to wait," Ernst slammed his hand on the table, his voice brimming with ambition, "then let's sound the charge in this Korean takeover battle."

"You mean you want to acquire a South Korean company?" Jane Fraser's mind raced, and she instantly understood Ernst's intention.

South Korea's financial sector is not yet open, so it's impossible to get a piece of the pie. The only thing you can buy at the bottom is fixed assets.

But then she thought about it again and frowned, her tone tinged with worry. "But at most we'll only get some soup, we won't get any meat at all. I think investing money in South Korea's infrastructure sector is a huge waste."

Wall Street wasn't completely inactive, but the activity was rather quiet.

They've been involved in industries related to people's livelihoods, like South Korea's electricity, ports, and water conservancy, for a long time. If they try to enter now, they might not even get a hot bowl of soup.

She thought that just like Wall Street was reaping profits in Thailand and Southeast Asia, Ernst was also targeting South Korea's public infrastructure.

These sectors are subject to excessive government intervention, and even if Ernst Asset Management were to get involved, it would only be picking up scraps from behind Wall Street giants.

"Who wants to eat leftovers from their guaranteed profits?" Ernst waved his hand. "I'm talking about those South Korean conglomerates. Now is a great time to buy them at rock-bottom prices."

Jane Fraser frowned even more upon hearing this, her expression changing several times. "Are you kidding me? There's just too much uncertainty in South Korea right now. To expand their scale, companies are leveraging themselves to the sky. Take Daewoo Group for example, their debt ratio is a whopping 519%, and Jinro Group is even more outrageous, with their debt ratio soaring to 3073%."

She gestured excitedly, feeling that this was not a wise choice. "What's the difference between this kind of excessive borrowing and building a skyscraper on the beach? The foundation is not stable at all, and it may be blown down by a gust of wind one day."

"Furthermore, South Korea's banking system is in dire straits, with a mountain of non-performing loans and a non-performing loan ratio skyrocketing, like a ticking time bomb—whoever touches it is doomed. Add to that the IMF's demand for South Korea to raise interest rates, further increasing financing costs for businesses. Isn't this pushing them to their doom?"

"Don't forget, the Korean Railway Corporation has already gone bankrupt. It was one of the top fifteen chaebols in South Korea," Jane Fraser's voice rose a few decibels, with a hint of urgency. "The situation of South Korean companies right now is too uncertain. Nobody dares to take a bite. Everyone is afraid that if they take a bite, they will be dragged into the quagmire."

Ernst understood everything Jane Fraser said. Right now, no company in South Korea has a low debt ratio; the entire country's economy is like sitting on a volcano, with undercurrents swirling beneath the surface.

Even if half of South Korea's top ten conglomerates were to declare bankruptcy, global capital would probably not be surprised, and might even applaud it.

After all, this would be a huge blow to the South Korean economy, and international speculative capital has been shorting South Korea. If the economy were to collapse again, the impact on the exchange rate would be fatal.

But Ernst had his own considerations. He pointed to the detailed reports on South Korean companies on the table, the pages filled with analyses of each company. "Don't forget, South Korea has long relied on an export-oriented economy. That's its foundation, its core."

"So even if it means selling everything they own, the South Korean government has to keep these companies alive, especially the top ten chaebols. Otherwise, with so many people losing their jobs, the whole country will be in chaos."

"And crises aren't without opportunities." Ernst's tone softened, his eyes showing a hint of appreciation. "Take Samsung, for example. It showed amazing resilience in the face of this storm."

Jane Fraser recalled the information in her mind and had to admit that Ernst was right.

As a mainstay of the South Korean economy, Samsung has a wide range of industries, including core sectors such as electronics, semiconductors, and finance.

In particular, the semiconductor business has begun to gradually replace Japan's position in the ARM chip and flash memory chip fields. It not only has advanced production lines, but also a very strong R&D team.

Despite the severity of the financial crisis, and the fact that Samsung was affected, with its stock price falling significantly and its financial pressures mounting, it has been much more stable than other conglomerates, maintaining relatively stable operations. This has already set it apart from other South Korean companies.

Every single chaebol in South Korea, except for Samsung, has experienced worker strikes or even riots at its subsidiaries.

"So you want to take over Samsung?" Jane Fraser stared into Ernst's eyes, trying to find more answers in his gaze.

"Samsung is just one of the main targets," Ernst said with a smile, his tone revealing a hint of ambition.

"If conditions permit, we can acquire some stocks in South Korea's top ten conglomerates."

"Right now, the stock prices of these conglomerates are practically free. If you miss out, you'll regret it for the rest of your life."

Take Samsung for example. Samsung Electronics' current market capitalization is less than two billion US dollars, and the entire Samsung Group's market capitalization is only 32 billion US dollars.

One hundred million U.S. dollars.

It's worth noting that before the financial crisis, Samsung Electronics' market capitalization exceeded five billion US dollars, and at its peak, it reached over six billion US dollars.

At this price, it's like a windfall; you'd be doing yourself a disservice if you didn't grab it.

Jane Fraser stared directly at Ernst, remained silent for a long while, and then slowly spoke, her tone tinged with doubt, "I always felt that you had other plans and weren't telling me the truth. If you were only interested in Samsung's current price, you certainly wouldn't have been so decisive."

Ernst couldn't help but burst into laughter after hearing this. "All I can tell you is that I can bring Samsung a huge order, enough for Samsung to weather this crisis and recover quickly. At that time, the value of our stock will multiply several times."

Jane Fraser was filled with curiosity, but she also knew that if Ernst were willing to tell her, he would do so without her having to ask.

If he's unwilling to talk, even if she pleads until she's hoarse, she won't get anything out of him.

However, knowing these facts is enough.

She didn't care about the other party's other plans; she only needed to be responsible to Ernst Asset Management. As long as the investment brought a good return, that was enough.