Reborn as a tycoon in Hong Kong

Hong Kong Stock Exchange.

Short-selling funds led by Henry Kaiser and others are constantly selling Hutchison Whampoa's stocks, while Lin Baicheng's funds, operated by Goldman Sachs, Morgan and other institutions, are constantly buying stocks below HK$25, one after another.

Hutchison Whampoa's stock price would fall sharply and then rise sharply, with an amplitude of three or four points at every turn due to the fact that both parties traded large orders.

As the amount of transactions between the two parties continues to increase, the trading volume becomes extremely huge, and many people can see that this is a game between long and short.

If the short side is strong, then there is no need to say that Hutchison Whampoa's stock price will definitely fall again, and it is almost a foregone conclusion that it will fall below 20 Hong Kong dollars per share. On the other hand, if the bulls are strong and hold on at the price of HK$25, after the bears can no longer suppress it, more funds will naturally enter the market to go long, and the stock price will inevitably rebound to above HK$30.

In this kind of long-short game, except for a few bold funds who dare to participate in long or short positions, more funds choose to sit on the sidelines and wait for the long and short sides to decide the outcome.

When the time came to eleven o'clock, the short side placed fewer and fewer orders.

In the VIP room where Henry Caesar and others were, Henry Caesar, Michael Kadoorie, George Swire, John Madden and others looked very ugly at this moment.

Of the 30 million shares borrowed in total, about 20 million shares have been sold in the past half hour or so. However, the funds on the pallet are like a bottomless pit, and they are constantly receiving orders, and all of them have been taken.

Henry Kasik said: "This bull is very strong, what should I do?"

John Madden said: "At this point, we must not admit defeat. We must first sell the remaining 10 million shares."

Michael Kadoorie nodded in agreement: "I don't believe that bulls have unlimited funds. As long as Hutchison Whampoa doesn't have big profits, we don't have to worry about the stock price rising."

George Schweizer also said: "Sell the remaining stocks first and see if the bulls can catch it. If they can, then we will discuss how to deal with it."

The four people made a decision, and the others had no objections. The traders who carried out the operation immediately continued to sell the remaining stocks.

About twenty minutes before the end of the morning trading, all the short stocks of the British-owned family were sold, but they were all caught, and the stock price immediately rebounded.

Although traders from Goldman Sachs, Morgan and other institutions stopped buying after the stock price exceeded 25 Hong Kong dollars, there was no large amount of selling. The funds that had been watching for a long time did not know that the bulls had won, so naturally a large number of funds chose to go long. When you buy a stock, the stock price will naturally rebound.

Henry Caesar and others were discussing how to deal with it. Lin Baicheng learned from Haruko Mouri shortly after the market closed in the morning how much money he had spent in the morning and how many stocks he had bought.

Lin Baicheng's principal is US$100 million, which is HK$420 million. After using five times leverage, the capital is HK$2.1 billion. In the morning, Henry Caesar and others alone sold almost 38 million shares below HK$25. Most of these stocks were taken over by Lin Baicheng's funds.

In addition, some stocks that followed the trend were sold. Therefore, although some funds were used to buy stocks below 25 Hong Kong dollars, more were sold, so Lin Baicheng’s funds bought more stocks. In the morning, there were enough About 41.5 million shares were bought.

The average purchase cost of these 41.5 million shares was HK$23.85, and it cost about HK$995 million including handling fees.

41.5 million shares account for about 10.375% of the 400 million shares, more than one-tenth of the total number of shares.

In the afternoon, Hutchison Whampoa's stock price fluctuated for a while at the price of HK$30. Although there were no large sell orders from the short side, there were no large buy orders to boost the stock price. Therefore, after the stock price fluctuated for about half an hour, it fell. To about 26 Hong Kong dollars.

After that, the stock price fell below 25 Hong Kong dollars, but because there was a tray underneath, it quickly rebounded. Since then, it has been fluctuating up and down at 26 Hong Kong dollars, and has been running above 25 Hong Kong dollars.

The reason why there was no short side selling a large amount of stocks and the stock fell sharply is because Hutchison Whampoa itself had negative news. The market did not recognize the stock price of 30 Hong Kong dollars. If you buy less and sell more, the stock price will naturally fall.

As short sellers, Henry Kaeserk and others did not take any action in the afternoon because they were still discussing and had not yet decided whether to continue to borrow stocks to suppress the stock price.

Adding up the two times, Henry Caesar and others have borrowed 70 million shares of stock. Although the first time was short selling through Standard Chartered, they actually borrowed stocks from HSBC, because Standard Chartered's stocks were borrowed from HSBC. At that time, they changed their hands in order to hide themselves.

Although they inquired and learned from HSBC that they could still borrow stocks, and there was no problem with 30 to 50 million shares, they had to consider what they would do if the borrowed stocks were taken over by multiple parties.

The number of stocks they can borrow is limited. If the bulls have strong funds and take all the sell orders, they will eventually have to buy back the stocks and return them to the brokerage. This is equivalent to raising the stock price in disguise and helping the bulls go long. If not, their short selling will result in losses.

Therefore, Henry Caesar and others had different opinions, and in the end they did not discuss the reason. Everyone decided to do this today and talk about it tomorrow.

It is said that the large number of shares lent by HSBC is related to Lin Baicheng himself. When he originally acquired Hutchison Whampoa, he used the 90 million shares acquired from HSBC as collateral to borrow HK$1 billion. The contract at the time allowed HSBC lends these stocks on securities margin.

Of course, the premise of all this is that Lin Baicheng's control over Hutchison Whampoa will not be affected. HSBC must ensure that a sufficient number of stocks are returned to Lin Baicheng at any time, otherwise it will be compensated by five times the real-time stock price.

Lin Baicheng stayed at Hutchison Whampoa all afternoon, paying attention to the changes in stock prices, but he did not expect that there was no movement from the short side in the afternoon.

After the stock market closed, Lin Baicheng left Hutchison Whampoa and went to Qingzhou Yingni Company.

It turns out that Qingzhou Yingni Company also held a shareholders' meeting and board of directors today. However, because of the important relationship with Hutchison Whampoa, Lin Baicheng asked his assistant Liao Siren to attend on his behalf.

Now that Lin Baicheng is the chairman of Qingzhou Yingni Company, of course he has to go there and arrange for someone to take over the company. As for the transaction with Li Jiacheng, it has been arranged to be conducted at Qingzhou Yingni Company tomorrow morning.

When the transaction with Li Jiacheng is completed and the time for acquiring the remaining shares from the stock market expires, Lin Baicheng can delist Qingzhou Yingni Company, and the company will be in his hands from now on.