Reborn as a tycoon in Hong Kong

In the evening, Lin Baicheng came to Hutchison Whampoa.

Lin Baicheng asked his secretary Qin Lan to call Peter Wei to the office.

"Peter, how's the deal with Standard Chartered going?"

"Mr. Lin, the Hang Seng Index has fallen recently, and the company's stock price has also continued to fall. As of today's close, the stock price has dropped to HK$37.4. Coupled with our losses in long gold futures, Standard Chartered is now somewhat unwilling to accept it. The fixed increase price is around HK$35.”

After Bao Yugang refused, Lin Baicheng approached Standard Chartered Bank, and Standard Chartered Bank was also willing to become Hutchison Whampoa's major shareholder, so that Hutchison Whampoa would have more business to cooperate with Standard Chartered in the future, instead of all choosing to cooperate with HSBC.

Therefore, the two parties negotiated the fixed increase price, and Lin Baicheng asked Wei Peter to be responsible for negotiating with Standard Chartered.

Although the fixed-increase price is between HK$33 and HK$37, for major shareholders such as Hutchison Whampoa and Lin Baicheng, the higher the fixed-increase price, the better, and Standard Chartered definitely wants the price to be as low as possible. So the two sides have been negotiating.

Standard Chartered is willing to accept a fixed increase of 40 million shares. Based on the minimum fixed increase price of 33 Hong Kong dollars per share, that is more than 1.3 billion Hong Kong dollars. Of course, such a large investment cannot be negotiated in two or three days. Both parties will agree on the price. Negotiations have been going on for more than a week.

However, now that the stock market is getting worse and worse, Hutchison Whampoa's stock price is also falling. This is because Hutchison Whampoa's losses in long gold futures have not been exposed, otherwise it will only fall more violently, but Standard Chartered Bank However, they knew that Standard Chartered was somewhat unable to accept the previously agreed price range.

In just about ten days, the international gold price has dropped from about US$200/ounce to about US$191/ounce. Hutchison Whampoa's cost price of US$206.8/ounce has dropped by 7.5%. Ten times leverage is 75%. , the principal of US$150 million was lost by more than US$100 million.

A large part of Hutchison Whampoa's current stock price is due to Lin Baicheng's investment, which allowed Hutchison Whampoa to make huge profits. If Lin Baicheng's investment vision no longer allowed Hutchison Whampoa to make money, but instead suffered huge losses, then Hutchison Whampoa's stock price would not be possible at all. As high as it is now.

Lin Baicheng asked aloud: "Then what price do they want to increase the price?"

Peter Wei replied: "They believe that it cannot be higher than 30 Hong Kong dollars per share, and 25 Hong Kong dollars is more reasonable. Although this is a tentative bid, they obviously hope that the fixed-increase price will be lower than 30 Hong Kong dollars per share."

"You continue to talk to Standard Chartered, but it's still in that price range. If Standard Chartered can't accept it in the end, then give up. I'll find a third party for the company's private placement."

Lin Baicheng said in a deep voice that he had his own funds to take over, so there was no need for him to accept a fixed increase at a lower price. Besides, if it really doesn't work, it might just be a fixed increase. Simply let the short seller make a profit. After the stock price drops to a certain price, he can let the offshore company buy a large amount of Hutchison Whampoa's shares.

"Yes, Mr. Lin!"

Peter Wei responded to express his understanding.

Afterwards, Lin Baicheng asked Wei Peter to leave and called Wei Li over.

Lin Baicheng asked Wei Li if there was any movement from the short side of Hutchison Whampoa, and learned that there was no movement at all from the short side. I neither borrowed any more stocks from brokers to sell, nor did I suppress Hutchison Whampoa's stock price. At the same time, I didn't buy stocks and return them to brokers. I haven't done anything since I started shorting. I'm very Buddhist.

Logically speaking, as a short side, this should not be the case. Either choose to suppress the stock price and make big money only if the stock price keeps falling; or buy it back after the stock price falls to a certain range and return it to the brokerage, safe in pocket.

Do nothing after shorting and let the stock price follow the market. Usually no short seller will do this.

The next day was Saturday again, and now it was November 25th, and it was about to enter December.

Not only is the Hang Seng Index falling recently, but the international gold price is also falling. It has almost fallen to 190 US dollars per ounce. Compared with last month's high of around 246 US dollars per ounce, it has fallen by nearly 23%, and the correction has been quite large. .

However, compared with less than 170 US dollars per ounce at the beginning of this year, the overall price of gold is still rising this year, and it has still increased by more than ten points.

The fall in gold prices is actually good for Lin Baicheng, because his US$700 million principal and US$5 billion leveraged financing means he buys more as the gold price falls, so the cost price is lower than expected, only US$198.47 per ounce, which is lower than the original price. The estimated cost of more than $200 per ounce is more than a point lower.

Don't look at it as just a few points. When the operation is 5 billion US dollars, 1% is 50 million US dollars, which is definitely not a low amount.

For now, Lin Baicheng has lost money on his gold futures investment, losing more than three points, which is more than 150 million US dollars. Fortunately, this is a temporary loss and will rise back later, so Lin Baicheng can hold on.

Speaking of losses, Lin Baicheng bought gold futures from Goldman Sachs and Bank of Mitsubishi above $210 per ounce, and they have now fallen by nearly 10%. Fortunately for Mitsubishi, Lin Baicheng only used five times leverage and had 20% downside, so there was no need to replenish the margin.

The situation is different at Goldman Sachs. Lin Baicheng used US$100 million in principal leverage financing to go long, and the purchase cost price was US$211.6 per ounce. Now it has fallen by almost 10%, and the closing price is approaching.

Fortunately, Lin Baicheng would definitely not watch his long position with a principal of 100 million US dollars be forced to be liquidated. Therefore, for insurance, he increased the margin by 50 million US dollars when the gold price fell to around 195 US dollars per ounce. So as long as As long as the price of gold does not fall below US$180 per ounce, he does not have to worry about closing his position.

If the price of gold continues to fall and falls below the price of 190 US dollars per ounce, Lin Baicheng will replenish the margin again when the gold price drops to 185 US dollars per ounce. Anyway, he will not watch the long futures position being liquidated. After all, he is different from others. He is not gambling. He knows very well how high the gold price will rise next year.

Using the same leverage of ten times, Hutchison Whampoa's cost price is 206.8 US dollars per ounce, which is not far from the forced liquidation. Yesterday, Lin Baicheng had the company transfer 50 million US dollars to the financing account as a margin. In this way As long as the price of gold does not fall below $180 per ounce, the position will not be liquidated.

By the same token, if the price of gold falls to around US$185 per ounce, Lin Baicheng will replenish the margin again and will not force Hutchison Whampoa's long gold futures positions to be liquidated.

Lin Baicheng only knows that the price of gold will rise to more than 800 US dollars next year and the beginning of the next year. He does not know the rise or fall in the middle, so there is nothing he can do if the gold price is much higher now. If he had known the rise and fall during the period, not only would Lin Baicheng not have bought the cost price so high, he would have gone short and made a fortune. Unfortunately, he didn't remember it so clearly.

Unlike Lin Baicheng who was holding on to additional margin, Lin Baicheng, who was related to Iwasaki Mineryu, knew that after Iwasaki Mineryu's gold price fell below 200 US dollars per ounce for the second time, he finally couldn't hold it anymore and bought the next one above 240 US dollars. The long futures investment was liquidated. Because of the use of five times leverage, the loss was as high as 90 million US dollars.

Today, Iwasaki Mineryu's long futures purchase above $200 is also losing money, but Iwasaki Mineryu still holds the money and does not touch it.

Before closing, Iwasaki Mineryu asked Lin Baicheng for advice. Lin Baicheng only said that he would hold the long order, but Iwasaki Mineryu finally chose to liquidate the long order and cut the loss.

Iwasaki Mineryu said that he believed in Lin Baicheng very much at first, but when the investment losses reached a certain level, no matter how beautiful he said, he would still make the choice he thought was right and no longer trust Lin Baicheng's judgment.

But this has nothing to do with Lin Baicheng. After Iwasaki Mineryu made his decision, he did not persuade Iwasaki Mineryu. He would not do anything thankless.