Hong Kong 1980: The Savage Era

Chapter 545 Chapter 547 [Acquisition of Barings Bank] (New book, please collect it)
After entering 95, the Hang Seng Index fell below 8000 points, and the decline was quite severe and seemed unlikely to stop.

Luo Qihong believes that the Hang Seng Index will fall to 7000 points, but he still thinks it is worth buying at the bottom. After all, the group and the family have too much money and need to buy in multiple batches.

He has ordered Heng'an Investment Company to take action to absorb high-quality blue-chip stocks and red-chip stocks. Of course, the speed is very slow and the funds used daily will not exceed 1 million Hong Kong dollars.

By January 1, the Hang Seng Index fell to 12 points, which caused panic in the market and some stocks fell sharply.

Luo Qihong believed that this was the lowest point, so he ordered Hengan Investment Company to buy the Hang Seng Index with a capital of HK$2 million and a leverage of 10 times.

Zhaoan Group also made big moves, spending huge sums of money to buy stocks of large, medium and small companies, causing the Hang Seng Index to climb back to 6900 points that day.

The news was published in the newsprint on January 1, saying that 14 points would be the lowest point and it was time to recover.

"Tycoon Luo has always been our guiding light. Now he is investing so exaggeratedly in the stock market. This must be the lowest point."

"On Monday (the 16th), I will definitely buy blue chip stocks and spend all my savings."

Many Hong Kong stock investors believe in Luo Qihong's vision and judgment, because Luo Qihong has never failed in the past decade or so and has almost always been able to withdraw in time.

Zhaoan Group Corporation.

Luo Qihong met with a group of senior executives of the group in the conference room to summarize the revenue situation in 94 and the general target plan for 95.

"In 94, Siu On Properties had rental income of HK$57.3 billion and a net profit of HK$45.84 billion. Due to the huge investment in hotels, the total net profit was negative HK$16.2 billion," Kang Wenyi reported.

".Residential development revenue was HK$410 billion, with a net profit margin of 31% and a net profit of HK$123 billion. The total profit was HK$209.1 billion." Chen Zhilong followed up with the report.

After the senior executives finished their reports, Luo Qihong just saw the end. As a listed company, Zhaoan Real Estate Company must announce its profit situation to the public. Excluding the investment in the acquisition of hotel brands, the total profit was HK$128.3 billion.

Asia Securities also made profits of billions of Hong Kong dollars, ranking sixth among the companies under the Zhaoan Group.

"The Hang Seng Index has started to recover, and the local market will follow suit. However, the stock market situation is still complicated, and I am afraid there will be some repeated rises and falls. After the market stabilizes, Siu On Properties will carry out a rights issue plan to raise approximately HK$80 billion. The group's rights issue funds will be offset by its properties." Luo Qihong set the tone immediately.

Zhaoan Real Estate Company has not raised funds through share offering for some time. It is not that Zhaoan Real Estate Company lacks development funds, but Luo Qihong wants to use the group's properties to raise its market value.

"Should Asia Securities also conduct a rights issue to raise funds? All the funds raised can be used to invest in overseas securities and stocks." Bai Jinyan suggested.

Although the Hang Seng Index has fallen a lot (compared to the same period last year), the market value of Asia Securities Company still remains above HK$50 billion, making it one of the blue-chip stocks in Hong Kong's securities and financial sector.

In fact, the market value of Asia Securities is underestimated. According to the current asset value, it should be at least HK$100 billion.

If Asia Securities was managed by Luo Qihong, its market value would have exceeded HK$10 billion long ago. Ultimately, Bai Jinyan is not brave enough.

"Okay, then does Dean Securities Investment have this money?" Luo Qihong asked.

Bai Jinyan nodded and said, "Yes, there is no need for the group to allocate additional funds."

"Asia Securities is the group's flagship in securities and stocks, but it must pay attention to its main duties. The main market is still in Hong Kong. Don't put the cart before the horse," Luo Qihong warned.

With the establishment of Asia Securities, Dean Securities Investment will be able to focus on overseas investment, so Luo Qihong does not want the two companies to have too much business overlap.

The time comes to mid-September.

The Nikkei index began to fall sharply, falling 276.6 points in just one day, closing at 17885 points. Luo Qihong shorted the Nikkei index with a leverage of 1 times and the average index was 10 points. He has made 19350 million US dollars so far.

He initially estimated that if the Nikkei index fell to 14000 points, he would eventually earn $3.7 million. After deducting interest and other expenses, he could make a net profit of nearly $3 million.

At the same time, Nick Leeson, general manager of the Singapore branch of the British Bank of Barings, took advantage of the loophole and bought a large amount of Nikkei Index, but unfortunately he bought for appreciation.

Singapore's Bahrain Bank already held more than 6 long index futures contracts. Faced with the continuous rise in Japanese government bonds, it held as many as 27000 short contracts, with an estimated loss of up to 8.6 million pounds.

Such losses made the bankruptcy of Barings Bank a foregone conclusion, and Nick Leeson had disappeared as if he had evaporated from the face of the earth.

"Bank of Bahrain! Do you want to take over the bankrupt Bank of Bahrain?" Bai Jinyan was slightly surprised.

The Bank of Bahrain was founded in 1763. Due to its flexible operations and courage to innovate, it quickly achieved great success in the international financial field. Its business scope is very wide. Whether it is copper mines in Africa, wool in Australia, or the construction of the Panama Canal, the Bank of Bahrain has provided loans.

The Bank of Bahrain is different from ordinary commercial banks. It does not have ordinary customer deposit business and its business expertise is corporate financing and investment management.

Luo Qihong wanted to use the Bank of Bahrain's tentacles around the world to develop his family's power, especially in emerging countries in Asia and Latin America that had not yet formed a fixed structure.

"Yes! It is very suitable for us. As long as we can resolve the losses of Bahrain Bank, this hundreds of years old bank can be revived, which will be of great benefit to the family." Luo Qihong nodded.

"But the loss is too huge, reaching tens of billions of Hong Kong dollars. Even the Bank of England (central bank) is preparing to liquidate the Bank of Bahrain." Bai Jinyan was worried.

Luo Qihong didn't want to explain anything further and said, "Don't worry! I have already thought of a solution. The group has the funds."

Seeing that Luo Qihong refused to listen to his advice, Bai Jinyan did not say anything else.

It was not until March 3 that Barings Bank took advantage of the Nikkei index rebound of more than 2 points and, with the assistance of the Bank of England and many other parties, closed all open futures contracts worldwide.

At this point, the Bank of Bahrain calculated the specific amount of losses, which was approximately 8.83 million pounds, or a total of 13.25 billion US dollars.

The bankruptcy of the Bahrain Bank Group shocked the international financial markets and caused the pound sterling to fall sharply against the mark to its lowest level in history.

The next day, Luo Qihong and a group of senior executives met with Bank of England Commissioner Ruth and others.

Luo Qihong is still somewhat famous in the UK, but his fame is limited. However, the senior management of the Bank of England found out Luo Qihong's assets in Hong Kong, Singapore and other places, so they felt relieved.

After all, major British financial institutions have no intention of acquiring the Bank of Bahrain, so they can only pin their hopes on foreign financial institutions.

During the negotiation, Ruth mentioned ING Bank, hoping to take the opportunity to raise the terms, but he did not expect Luo Qihong to agree immediately.

In fact, Ruth's request was not too excessive. The shares of Barings Bank were already worthless, and the capital injection was only to offset the losses on the books.

Although senior officials at the Bank of England preferred ING, the terms offered by the latter were too low, and the bank even wanted the Bank of England to help it smooth out some of its debt problems.

Naturally, the top brass of the Bank of England would not agree to this, so it would be better to just leave it alone.

Therefore, Luo Qihong is their last choice.

(End of this chapter)