Reborn in Russia as a Big Shot

Chapter 120 Buying the Dip in the A-Shares Market

Li Xiang's visa was expiring and he was preparing to return to Russia, so he made a detour to Hong Kong on the way.

Shangri-La Executive Lounge.

"Who is this Mr. Li?" Jin Tu is a fund manager at Value Partners Group, managing three QFII mainland A-share funds, one actively managed fund, and two index funds.

"Why do you care so much? As long as you have money, that's all that matters."

Yong Ge helped me find the person.

Yong Ge himself certainly didn't have any connections, but he had a good godson who could easily get things done by simply informing Xiang Zuo.

Yong Ge did not reveal his actual relationship with Li Xiang to Xiang Zuo, only that Li Xiang was the boss of New Century Entertainment, which was the client of Xiang Zuo's new company.

For Xiang Zuo, this flattery is something he has to do, both for public and private reasons!

Jin Tu knew who Yong Ge was, of course; but like a scholar encountering a soldier, he couldn't be bothered with him.

Li Xiang had already arrived at the hotel and waited for nearly fifteen minutes before he finished packing and went to the executive lounge.

"Hello, Mr. Li."

Jin Tu immediately stood up to greet him, but before he could even introduce himself, Li Xiang said first, "I've seen your information. Your name is good; it suggests a promising future."

After taking his seat, Yong Ge noticed that Li Xiang and Jin Tu were both looking at him, and asked somewhat awkwardly, "Can't I listen? Then you..."

They chatted while I left.

Li Xiang said, "After we finish talking, the three of us will have dinner together. You can go downstairs and order first, then put it on my bill."

Yong smiled and said, "Take your time talking, don't rush."

After Yong Ge left and closed the door, Li Xiang got down to business.

"I have some money in US stocks and want to withdraw it and invest it in A-shares. Does your large-cap index fund have any subscription restrictions?"

Jin Tu immediately perked up and quickly said, "No limit, you can buy as many as you want. How many would you like to subscribe to?"

Li Xiang held up one finger and asked, "Can I buy it for this price?"

"One million? No problem, subscribe today and confirm your share tomorrow."

"What if we add two zeros at the end?" Li Xiang asked.

"One hundred million!" Jin Tu's expression changed slightly, but he remained excited. He subconsciously swallowed and said, "That's a bit difficult. It might take a few days to confirm the quota, but I can guarantee that I can buy it for you within a week."

When mutual funds encounter a stock market crash, they are often powerless to do anything about it. When clients redeem in large quantities, they have to sell stocks. The more they sell, the more the stock price falls, and the greater the redemption pressure becomes.

"Be greedy when others are fearful." For Jintu, encountering a big investor like Li Xiang, who dares to buy at the bottom against the trend, is like finding a treasure.

Unfortunately, Li Xiang was buying index funds, meaning his portfolio was passively allocated. If it were actively managed funds, he wouldn't be forced to sell at the bottom, leading to a greater performance boost.

"What if it's a hundred million US dollars?" Li Xiang asked again, increasing the investment amount.

Jin Tu frowned, but still tried to maintain a smile. "Mr. Li, how much do you intend to subscribe to?"

Li Xiang said seriously, "That depends on how much you can let me subscribe to. I've done my homework. As of March this year, the total QFII quota in Hong Kong is about 200 billion US dollars."

"With the current economic climate so bad, and funds flowing out in the net, there must be some QFII quota left. One hundred million US dollars only accounts for 0.5% of the total quota. Can't they even buy in with that?"

Jin Tu stared at Li Xiang for a long time, then suddenly asked, "You speak such fluent Mandarin, you must be from mainland China, right?"

Li Xiang admitted, "Yes, my household registration is still in mainland China."

"Then you can go back and buy it. You can buy as much as you want; there's no limit." Although Jin Tu maintained his composure in his attitude—a matter of professionalism—he had already decided in his heart that Li Xiang was playing him.

How reliable can the clients introduced by these two heroes, Xiang Zuo and Zhang Renyong, be?

To claim hundreds of millions of US dollars with a single sentence is something Jin Tu is more inclined to believe; it shows a complete lack of understanding of money and an inability to even know how to boast properly.

"That requires foreign exchange settlement. It's easy to bring the funds in, but will I be able to get them out?" Li Xiang had already noticed Jin Tu's change in mood and said with a serious expression, "I want to buy A-shares through offshore channels."

"Isn't Value Partners the largest independent asset management company in Hong Kong? I saw on your website that it focuses on value investing in Greater China A-shares. Is that false advertising? A scam?"

"Really buying?" Jin Tu composed himself and said, "One hundred million is manageable, but such a large sum of money requires you to lock it up. Is that acceptable?"

"How long will it be locked?" Li Xiang asked.

"Three months, with one month's notice for redemption." Jintu knew this was unfair to Li Xiang, so they offered, "You're a major client, so we can offer you the biggest discount on management fees, but the lock-up period is non-negotiable."

"What if it were a billion US dollars?" Seeing Jin Tu's speechless expression, Li Xiang changed the subject, asking, "Hong Kong only has 200..."

"Give me your industry experience and assess the QF quota of 100 million. Ignoring how much money I can actually contribute, what's the maximum amount I can subscribe to?"

Although the topic is getting more and more outrageous, we've already come this far, so let's go all out and be completely crazy.

Jin Tu sighed and said, "I'd like to lock up 300 to 500 million shares. Other fund managers will definitely make similar requests, it's just a matter of how long they'll hold them."

"Can't we have any more?" Li Xiang pressed.

"If you include actively managed funds and private equity, which amount to five to seven hundred million, you can also buy some ETFs from the secondary market. These are denominated in Hong Kong dollars and do not count against your quota."

After thinking for a while, Li Xiang said, "Let's say 700 million. You help me contact them. I'm planning to buy a 700 million US dollar position."

"Since your Independent Commission Against Corruption (ICAC) in Hong Kong is investigating so strictly, I won't give you any kickbacks. The subprime mortgage crisis is so severe that global financial markets are shrinking their balance sheets, and everyone is short of money."

"With such a large sum of money you've secured, even if you're just helping to make connections, you'll be able to earn enough."

"So, can you take care of this for me?"

"As long as the money is in place," Jin Tu said, then realized the implication was ambiguous and added, "I'm talking about your seven hundred million US dollars. When will that be available?"

Li Xiang replied, "Around October."

"There are still about six months to go, so it's good to prepare in advance, but words alone are not enough. You need to pay some deposit as a token of your interest," Jin Tu requested.

Li Xiang refused, saying, "If I were willing to pay a deposit, would I need to come to you? The fact that you're sitting here talking to me means you're profiting from the risk premium I might back out of the deal."

Jin Tu tapped his head to clear his head and said, "I can go crazy with you, but I'm just a fund manager. If I say I have a $700 million fund coming in in October, do you think people will believe me?"

"Let's sign an agreement. The amount of the deposit is just a formality; you need to have the cost of breaching the contract to be convincing."

"Let's not waste time. Give me a real price. What's the minimum deposit?" Li Xiang threatened. "I'm not going to haggle. If you ask for too much, I'll just run away."

"Let me calculate it for you." Jin Tu used his phone calculator to calculate the standard subscription fee of seven hundred million US dollars, and then gave a discount on that. He looked up at Li Xiang and said, "You'll have to pay at least one million US dollars."

"This money isn't for me, it's for our company. If your funds don't arrive by October, this million will be gone."

Li Xiang said, "One million is no problem, but the time and amount can't be set too rigidly; we have to leave some room for flexibility."

"Your demands are reasonable. We can discuss whether it's more or less, sooner or later, as long as you're willing to pay." Jin Tu breathed a sigh of relief. It was like picking up a lottery ticket on the street, knowing you wouldn't win, but still wanting to try your luck.

One million US dollars is insignificant compared to the 700 million position mentioned by Li Xiang, but as long as the intention to subscribe is received, it at least shows that the intention to subscribe is real.

However, the cost of defaulting is too low; wanting to buy now doesn't mean wanting to buy in October.

The capital market is constantly changing, and even the slightest change could lead Li Xiang to change his decision.