Hong Kong Movies: You Hongxingzi, what the hell is the charity king?

Chapter 849 "847" January 1998, Soros' second attack!

The sky was cloudless and the sun shone brightly.
It dispelled the chill of Hong Kong Island in December.

Central Plaza, top floor, Kwan Cho's office.

Peregrine Investments?

After hearing his secretary Liang Xiaorou's report, Guan Zu smiled slightly, as if he had expected it.

He had been keeping an eye on Peregrine Investments for a while, but the investment bank was always looking for foreign capital to bail it out, so he didn't take any action.

Guan Zu thought for a moment and said, "I'll agree to it. Shangri-La Hotel tonight."

Liang Xiaorou: "Yes!"

Guan Zu looked at the calendar. In the original history, when did Peregrine's scandal break out?

It seems to be before the Spring Festival in January.

Soros then realized the opportunity and launched a second wave of attacks, dumping HK$300 billion in a few days. As a result, the Hong Kong stock market fell by 2000 points in a few days, causing panic among the citizens of Hong Kong Island.

Guan Zu could have easily chosen not to save it.

However, saving it would be beneficial.

Moreover, it has many red-chip stocks.

What are red-chip stocks? They are stocks registered outside of China but listed in Hong Kong that have a mainland China concept.

Therefore, it involves the mainland.

In the early 1990s, mainland China had not yet established a comprehensive company law and securities law, making it impossible for companies registered in mainland China to directly list overseas. Peregrine devised innovative methods such as "backdoor listings" and "window company restructuring" to assist Chinese companies such as CITIC Pacific, Guangdong Investment, and China Merchants Group in listing in Hong Kong.

For example, in 1990, CITIC Pacific went public through a reverse merger with Tai Fook Development, becoming the first red-chip stock and marking the formal entry of mainland enterprises into the international capital market.

By 1997, Peregrine's red-chip listing projects covered key sectors such as power, transportation, and real estate, assisting companies such as China Merchants Group, China Travel Service, China Overseas, Yuexiu Property, and Guangzhou Shipyard in listing, forming investment themes such as "Guangzhou concept," "Shanghai concept," and "capital economy," attracting international capital to focus on the potential of mainland economic growth.

By 1997, 23 mainland companies had been listed in Hong Kong, accounting for 7% of the total market capitalization of the Hong Kong stock market.

In addition, rescuing it could stabilize the stock market and prevent it from falling too sharply.

……

……

Evening at the Shangri-La Hotel.

Chinese restaurant.

When Guan Zu arrived with his secretary Wu Lianqian and bodyguard Ding Hu, Liang Botao had already been notified and was waiting at the door of the private room.

"Mr. Guan, it's been a long time!" Liang Botao greeted him with a big smile, quickly stepping forward and extending his hand warmly.

"Mr. Liang...!"

After exchanging pleasantries, they took their seats.

Liang Botao warmly toasted Guan Zu, then subtly flattered him, making Guan Zu feel comfortable and at ease.

After five courses of food and three rounds of drinks,
Liang Botao finally began to talk about the current situation of Peregrine.

"Mr. Guan, to be honest, Peregrine's situation is quite troublesome right now."

"Before 96, Southeast Asian countries were experiencing economic booms, so Peregrine invested heavily in the Southeast Asian bond market. Who could have predicted that the financial crisis would hit, causing those countries' currencies to depreciate sharply and the value of bonds to plummet? This led to a serious financial crisis for the company."

He needed Guan Yu's help, so naturally he had nothing to hide.

Moreover, if Guan Zu really wanted to bail out Peregrine, he would have to conduct a strict asset audit, and nothing would escape Guan Zu's watchful eye.

So it's better to be honest now.

"We had previously planned to bring in Zurich Group and First Chicago Bank as strategic shareholders to alleviate our financial pressure, and the negotiations were almost complete, but now they have both cancelled their subscription plans..."

"The company's cash flow is currently tight, with a large amount of debt due every day. If this continues, Peregrine may..."

Liang Botao didn't finish his sentence, but the meaning was crystal clear.

He looked at Kwan Cho with a hint of pleading: "Mr. Kwan, the Five Star Group is a powerful and influential company in Hong Kong's business community. Peregrine is now on the verge of collapse, and we hope you can lend us a hand..."

Guan Zu nodded: "Okay!"

He had no idea how Liang Botao was thinking, nor did he bother to use such methods.

So I nodded in agreement.

"Really?"

Liang Botao was pleasantly surprised; he hadn't expected it to be so easy.

Guan Zu: "Since I'm here today, I naturally made a decision beforehand to avoid wasting time. But let me make this clear beforehand... you Peregrine's problems need to be corrected."

He had been keeping an eye on Peregrine for a long time, so he had started investigating it quite early on, and naturally knew a lot about Peregrine.

Liang Botao nodded repeatedly: "No problem."

This crisis exposed his problems with Peregrine.

Once we get through this crisis, we'll naturally have to start dealing with it.

Next, the two sides discussed specific support plans.

It mainly involves capital investment and credit guarantees.

Of course, it's impossible to discuss this in detail. The Five Star Group needs to send a team to conduct a thorough investigation, and then hold a meeting to make a decision.

At last,
Kwan Cho-tao said, "I will back Peregrine, but I also need Peregrine to put on a show for me."

Liang Botao: "Mr. Guan, please speak."

Then Guan Zu didn't go into detail about the plan to target international speculative capital; he just told him to cooperate and not to ask why.

……

A new day,
Five Star Group then assembled an audit team and officially joined Peregrine.

The news still got out.

Previously, some economic reporters had paid attention to the Peregrine issue, but these were all rumors and did not attract much attention.

But now it's different. The Five Star Group has sent people to take over, which definitely means something bad has happened.

……

Meanwhile, on the other side,
Landmark Plaza, brightly lit, Soros Fund Management.

Rodney Jones' team is holding a meeting.

"The stock market on Hong Kong Island has always been very stable... We need to continue looking for a breakthrough..."

"Boss, we've received a message from headquarters about Peregrine, the company we've been keeping an eye on. It might be of some use."

"what's up?"

“We’ve been keeping an eye on Peregrine’s situation. According to news from headquarters late last night, both the Bank of Chicago and the Zurich Group have declined to invest. This means Peregrine currently lacks the financial support…”

"Really?" Rodney Jones and several other members of the core team all perked up.

"If Peregrine were to collapse..."

"The Hong Kong stock market is bound to crash!"

"it is good!"

Rodney Jones slammed his fist on the table: "Contact HSBC and Standard Chartered immediately to find out about Peregrine's situation!"

quickly,

The group of people who were laughing heartily suddenly stopped laughing.

Because HSBC informed them of the latest news that Five Star Group was going to invest in Peregrine.

Rodney Jones: "…………"

Other members: "…………"

Overturn the table (╯‵□′)╯︵┻━┻Ah!

Why are you everywhere!

Rodney Jones gritted his teeth: "No matter what, let's leak this news first and see how the Hong Kong stock market reacts!"

……

quickly,

This news, like a pebble thrown into a calm lake, has stirred up ripples in Hong Kong's financial and stock markets.

Initially, the Hang Seng Index remained relatively stable, but as news spread in the market, panic began to spread, and some astute investors chose to sell their stocks.

The index declined slightly in the final trading session, ultimately falling 0.8% from the previous day's closing price.

Guan Zu did not choose to support the price, but instead allowed it to fall.

The following day, major financial media outlets began reporting on Peregrine's financial difficulties.

The stock market couldn't hold on any longer, with a continuous influx of sell orders. The Hang Seng Index fell another 0.6% that day, with some financial and real estate stocks closely related to Peregrine's business experiencing even more significant declines.

Rodney Jones quickly dumped shares that day and called the United States. Soon after, Soros and international speculative capital moved in, dumping HK$90 billion in the foreign exchange market in one day.

In the following days, international speculative capital continued to sell Hong Kong dollars in the foreign exchange market, selling 300 billion Hong Kong dollars in just 5 days.

The Hong Kong Monetary Authority raised interest rates again, and the stock market continued to fall...

Soros' second attack has finally arrived.

then……

1 month 2 day,
Five Star Group, together with Peregrine, held a press conference that attracted much attention in Hong Kong.

Reporters from various media outlets were constantly flashing their cameras.

Guan Zu did not show up.

Instead, it was Five Star Bank President Chen Yongren and Peregrine President Liang Botao who served as spokespeople for the press conference.
"In order to reduce market panic and maintain stock market stability, Five Star Group will..."

"Five Star Group will directly inject HK$100 billion into Peregrine through methods such as subscribing to Peregrine's redeemable convertible preferred shares..."

"At the same time, we will also provide a HK$50 billion loan to help Peregrine repay its maturing debts."

"We will also introduce more high-quality clients and business opportunities to Peregrine to help it restore profitability and fundamentally solve its financial difficulties..."

"Finally, regarding asset disposal, we will adopt a reasonable asset divestiture strategy. In particular, our corporate finance and securities trading businesses in the Greater China region possess excellent development potential and market value..."

"In addition, we will package some non-core assets, such as non-performing bonds and overseas business branches, into asset packages..."

With the official announcement from Five Star Group, the Hang Seng Index finally stabilized.

Peregrine Investment Bank was, after all, one of the leading investment banks, and its collapse still affected the public's confidence in financial companies.

Therefore, the stock market did not continue to rise.

Instead, it remained at 13400 points.

Subsequently, the Soros Fund and international speculative capital poured over HK$10 billion into the foreign exchange market, causing it to fall... and the stock market continued to decline...

Guan Zu still did not make a move.

A slow and steady decline is the best scenario.

Soros's position level will be lower, so when the price rises, Soros will lose more.

It also gives international speculative capital enough confidence to build new positions.

……

……

at last,

The time has come to 1998.

In September,

Two major events have occurred in South Korea.

The first thing was that Kim Dae-jong was sworn in as President of South Korea.

Upon taking office, he initiated several significant actions:
First, in accordance with the IMF's conditions, restrictions on foreign ownership of South Korea's securities industry were relaxed. However, in order to deal with the crisis, he strengthened the independence of the central bank and established the Financial Supervisory Commission.

Second: The "Five Tasks for Corporate Reform" were introduced to reform the chaebols, and "structural adjustments" were made to the five major chaebols, including Hyundai, Samsung, and LG.

Third: For the first time, efforts were made to ease tensions with North Korea by proposing "inclusivity and coexistence," aiming to improve inter-Korean relations on the basis of reconciliation, cooperation, and peace.

Fourth: Break the ice with the University of Tokyo, and stop pursuing hatred, hostility, and conflict, instead increase economic and trade cooperation.

Of course, there's a fifth thing...

In September,

Inside the Blue House, Kim Dae-jong and his wife donated pieces of gold jewelry in front of numerous television stations and media reporters from Yonhap News Agency, KBS, and MBC.

Facing the camera, Kim Dae-chong said firmly, "These gold ornaments carry precious memories of my wife and me, but the fate of the nation is far more important than personal sentiments."

"Today's donation is not a call for everyone to follow our example and give up their personal belongings, but rather to convey a belief—the fate of the nation is written by every Korean..."

His speech, which lasted a full minute, was broadcast throughout South Korea via television.

It quickly sparked a warm response across the country.

Long lines formed outside banks across South Korea as people, holding gold jewelry, waited patiently to make donations. Even churches donated gold crosses and icons.

(P.S.: As of March 1998, this patriotic movement had attracted 3.5 million South Koreans, who donated a total of 227 tons of gold.)
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P.S.: Something big happened these past two days, so the second chapter will be delayed.

P.S.: Many readers said they didn't want to read about the complicated operational process of the financial crisis, so I simplified the second one. The third attack will be the final battle in August.

(End of this chapter)