Chapter 515: The Surprise Attack and the Peak Battle on August 28!
At 10 o'clock, after the opening of the Hong Kong stock market, the Hong Kong government and international speculators immediately started a fierce battle on the two super blue-chip constituent stocks of "HSBC Holdings" and "Hong Kong Telecom", and Li Xiaofan's funds assisted at key points.
The selling orders of international speculators were fierce and overwhelming, and the Hong Kong government resisted them, and bought them all without leaving a single one.
Only 5 minutes after the opening of the market, the transaction volume reached 3.9 billion Hong Kong dollars, which is a rare sky-high volume since the establishment of the Hong Kong Stock Exchange!
Half an hour later, the transaction amount exceeded 10 billion Hong Kong dollars. By the close of the morning, the transaction amount had reached more than 40 billion Hong Kong dollars, close to the record of 46 billion Hong Kong dollars set on August 29, 1997.
Before the closing of the lunch market at 12 noon, the battle became more intense. Many blue-chip stocks such as "Cheung Kong Holdings" and "China Telecom" were frantically sold by international speculators, and a large number of European funds entered the market. The surging stock market was reversed by the Hong Kong government funds.
After the market opened in the afternoon, Li Xiaofan found that the situation was getting more severe.
The selling orders from international speculators rolled in, and the Hong Kong government almost used up all the foreign exchange reserves it could use, and took them all, defending them on all fronts. On average, 350 million yuan worth of stocks changed hands every minute.
At 3:55 p.m., five minutes before the closing, on the 28th floor of the Bank of China Building, with Li Xiaofan's order, Li Xiaofan and his team suddenly used the last 3 billion Hong Kong dollars in ambush to help the Hong Kong government funds to boost super blue-chip stocks such as HSBC Holdings, Hong Kong Telecom, Cheung Kong Holdings, Hutchison Whampoa, and China Telecom.
At 4 p.m., with the assistance of the "surprise attack" commanded by Li Xiaofan, the Hang Seng Index finally settled at 7902 points! It was 83 points higher than the previous closing of 7829 points.
After four thrilling hours, the full-day trading volume reached the highest record of 84 billion Hong Kong dollars in the history of the Hong Kong stock market! The Hang Seng Index futures finally settled at 7885 points.
As the bell rang at 4 p.m., the Hang Seng Index, futures index, and transaction amount that kept jumping on the display screen finally locked at 7902 points, 7885 points, and 84 billion respectively.
August 28th is a day that will go down in history!
The Hong Kong government won a great victory in the battle to defend Hong Kong's finances, pushing the Hang Seng Index from 6660 points at the close on August 13 to 7902 points on the 28th, and forcing speculators to settle and deliver August stock index futures at high prices.
In the above 10 trading days, the Hong Kong Special Administrative Region Government used about 120 billion Hong Kong dollars in foreign exchange reserves to pull the Hang Seng Index up by 1242 points.
Since entering the market, the Hong Kong government has used more than 10 billion US dollars and consumed about 13% of the foreign exchange fund.
At 6661 points in Hong Kong stocks, Li Xiaofan opened 20,000 long orders for stock index futures for delivery in August, and then opened another 10,000 long orders.
After closing the previous 20,000 long positions of stock index futures for August delivery, a profit of HK$1.24 billion was made.
The next 10,000 long positions of index futures made a profit of HK$370 million.
In total, Li Xiaofan made a net profit of HK$1.6 billion from the stock index futures for August delivery in Hong Kong stocks.
In the evening of the same day, the Hong Kong Monetary Authority reviewed the market. On that day, the Hong Kong government bought about HK$79 billion worth of stocks through the Hong Kong Monetary Authority, and another HK$5 billion transaction seemed to be done by another mysterious "alliance".
In the previous life, the Hong Kong stock market's single-day transaction record on the 28th exceeded a historical high of HK$79 billion, and there was basically only one buyer: the Hong Kong Monetary Authority. The former head of the Hong Kong Monetary Authority recalled after retirement that the amount of their HKMA's sweeping that day was almost the same as the transaction amount of HK$79 billion.
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In the peak battle of the "8.28" Hong Kong Island Financial Defense War, the Hong Kong government finally won a decisive victory.
The international speculators who suffered heavy losses did not give up. They believed that the Hong Kong government had invested a huge amount of about HK$100 billion. The financial pressure and public opinion pressure made it impossible for them to support it for a long time. Therefore, they decided to transfer the short-selling stock index futures contracts from August to September, hoping to fight a protracted war with the Hong Kong government and hope that the September contract would become their "life-saving straw".
Starting from August 25, speculators sold a large number of September contracts while closing the August contracts.
For the Hong Kong Special Administrative Region Government, the "8.28" battle can only be regarded as a staged victory. The Hong Kong government decided that the Hong Kong government would continue to push up the stock index futures prices in September on the basis of the profit from the closing of the August contract. The Hong Kong government took advantage of the profit from the closing of the August contract to make the price of the September contract 650 points higher than the settlement price of the August contract.
In this way, speculators have to pay more than 30,000 Hong Kong dollars for each transfer of a contract. The speculators were completely defeated in the competition for the August contract.
On September 7, the Hong Kong Monetary Authority issued new regulations on foreign exchange, securities trading and settlement, which greatly restricted speculators' speculation. On that day, the Hang Seng Index soared 588 points and closed at more than 8,100 points.
Coupled with a series of factors such as the appreciation of the Japanese yen and the stabilization of the Southeast Asian financial market, the capital and exchange costs of international speculators such as Soros increased significantly, and they had to withdraw from the market.
According to the Hong Kong Economic Daily, the flagship Quantum Fund commanded by Soros lost US$500 million in one day on August 31 due to a sharp drop of more than 500 points in the US stock market, and lost more than US$1 billion in August.
It is reported that Soros lost nearly US$800 million in this battle in Hong Kong.
On September 8, the price of the September futures contract rose to 8,220 points.
The futures contracts transferred at the end of August had to be closed and exited, and each contract would lose another 40,000 Hong Kong dollars.
At this point, international speculators saw that the situation was hopeless and fled in panic.
Starting from the beginning of September, in addition to continuing to open long positions in the September Hong Kong stock index futures contract, Li Xiaofan gradually reduced his holdings of more than 10 billion Hong Kong stocks and sold them at high prices.
In order not to alarm the market, Li Xiaofan's Hong Kong stocks with a market value of more than 10 billion were sold one after another until December at the end of the year.
By the end of 1998, when Li Xiaofan's funds were basically withdrawn from Hong Kong stocks, he made a profit of 1.8 billion Hong Kong dollars on futures contracts and 2.5 billion Hong Kong dollars on stocks, with a total profit of 4.3 billion Hong Kong dollars, which is about 550 million US dollars.
He continued to keep a small part of his funds in Hong Kong stock index futures contracts, because in his previous life, by the end of next year 1999, the Hong Kong Island Hang Seng Index will exceed 16,000 points.
There are all the codes for getting rich quickly!
…
After the battle in Hong Kong ended, Li Xiaofan returned to Singapore and looked around the surrounding Southeast Asian countries and regions, finding that they were already covered in wounds.
The overall technological level of the Japanese economy has been widening the gap with that of the United States. Analysts pessimistically believe that Japan has entered the worst economic recession in the past 50 years.
Indonesia has lost the fruits of a generation of development almost overnight.
Thailand's stock market has lost 90% of its market value.
Malaysia simply closed its doors, implemented foreign exchange controls, and no longer dealt with foreigners on capital projects.
With the collapse of the Russian economy, Western economists have been talking about the bankruptcy of the entire concept of emerging markets. The total amount of foreign debt owed by Russia that year will be as high as 200 billion US dollars, which is said to be the largest foreign debt owed by a government in human history.
Wang Danrong reported to Li Xiaofan that according to statistics, from the Asian financial crisis in July last year to the end of 1998, about hundreds of billions of dollars of funds have flowed out of Asia, and there is only more now.
The phenomenon of capital depletion and bank reluctance to lend caused by the collapse of the bubble economy, sluggish market demand and low investment returns is like a ghost, wandering around the Asian continent...
The international financial giants still seem to be eyeing Hong Kong Island. As long as the basic economic conditions of Hong Kong Island do not improve fundamentally, this threat cannot be fundamentally eliminated.
It is reported that the main force of international speculators has not completely withdrawn from the battlefield. Some US banks and investment companies are still buying Hong Kong Island's one-year forward foreign exchange contracts.
It is said that Soros's Quantum Fund alone has a forward position of 40 billion Hong Kong dollars due on February 8 next year...
In September this year, the Chief Executive of Hong Kong Island "visited" Shenzhen to inspect the proposed future Shenzhen High-tech Development Zone.
At the end of the year, the Hong Kong government issued a policy report to revitalize the science and technology industry. The chairman of the report drafting committee is the Chinese-American scientist Tian Changlin, president of the University of California, Berkeley. The Hong Kong Joint Stock Exchange and many investment institutions are also studying the establishment of a GEM market aimed at serving small and high-tech small enterprises in the Mainland and Hong Kong...
After September, the Chief Executive personally led a team to the "Silicon Port" project under construction in Gangxian Bay, Pokfulam, South District, Hong Kong Island several times to visit Dr. Zhang and Li Xiaofan's team who were directing the construction on site.
In October, the Hong Kong government successfully passed the "special support policy" for the Silicon Port project led by Li Xiaofan and Dr. Zhang.
After the dangerous battle to defend Hong Kong's financial sector, people in Hong Kong have begun to realize that:
Relying solely on traditional industries such as high-rise buildings and real estate in Hong Kong is no longer enough to resist the repeated attacks of those international financial predators.
If it is said that before, the six million people in Hong Kong have paid more than 20,000 Hong Kong dollars each to defend the linked exchange rate, then in the long run, the introduction of high-tech "Silicon Port" projects led by Li Xiaofan and Dr. Zhang, and the learning of Silicon Valley to incubate a group of innovative and technology-intensive high-tech emerging enterprises in the future, Hong Kong's ability to resist international storms in the future may be a hundred times more effective.
People in Hong Kong's investment and education circles also believe that Hong Kong must create prosperity in the 21st century by providing financial services to emerging enterprises in the Mainland with high knowledge content and advanced technology!