Chapter 627
Preparations for Market Rescue
In early 1998, Indonesia was hit by another financial crisis. Faced with the worst economic recession in history, the countermeasures formulated by the International Monetary Fund for Indonesia failed to achieve the expected results.
On February 11, 1998, the Indonesian government announced a fixed exchange rate system, linking the Indonesian rupiah to the US dollar, in an effort to stabilize the rupiah. This move was met with unanimous opposition from the International Monetary Fund (IMF), the United States, and Western Europe. The IMF threatened to withdraw its aid to Indonesia, plunging the country into a major political and economic crisis.
On February 16, 1998, the Indonesian rupiah fell below 10000 to the US dollar. This triggered renewed turmoil in Southeast Asian currency markets, with the Singapore dollar, Malaysian ringgit, Thai baht, and Philippine peso all depreciating.
The Southeast Asian foreign exchange market only calmed down after Indonesia reached an agreement with the International Monetary Fund on a new economic reform plan on April 8.
1997年爆发的东南亚金融危机使得与之关系密切的日本经济陷入困境。日元汇率从1997年6月底的115日元兑1美元跌至1998年4月初的133日元兑1美元。
With the sharp depreciation of the yen, the international financial situation became more uncertain, and the Asian financial crisis continued to deepen.
However, during this period, the Hong Kong Ping An Index fluctuated repeatedly from 12800 points at the end of last year. As major companies released their profit figures for the previous year in March (1997 was still quite good), the Ping An Index rose to 14200 points.
Although it is still down 30% from last year's peak of over 20600 points, it is still a rare sign of resilience.
But clearly, after withdrawing from Southeast Asia, international speculators will naturally move to Hong Kong to further reap profits.
Moreover, during this period, international speculators issued HKD bonds worth US$400 billion in Hong Kong with an annual interest rate of 11%. These international financial institutions swapped these Hong Kong dollars for US dollars, while the borrowers of Hong Kong dollars were mainly hedge funds.
These Hong Kong dollars became low-cost leverage for hedge funds to attack the Hong Kong financial market, giving speculators favorable conditions for arbitrage in the foreign exchange market. Meanwhile, hedge funds bought large amounts of forward US dollars in the foreign exchange market to balance risk. It is said that Soros's funds held approximately $40 billion in buy contracts, expiring in February 1999.
The war is about to start.
In the real estate sector.
In January, major property developer Sun Hung Kai Properties suddenly announced that it would halt or slow down development on 10 of its projects. The news had a huge psychological impact on the real estate and stock markets.
Faced with a significant adjustment in the property market, the Hong Kong government began to soften its stance on the target of 85000 houses, and handled land sales and housing policies more flexibly. In 1998, the target of 85000 houses was effectively shelved.
In February, Hong Kong Financial Secretary Donald Tsang announced in the budget that the commercial site in Tamar, Central, would be used for the construction of the government headquarters instead of being put up for auction. He also proposed a series of measures, including rate reductions, mortgage tax exemptions, and encouragement for citizens to own their own homes. He also consulted with major property developers to flexibly handle the annual housing target of 85000 residential units, which led to a brief "mini-boom" in the property market in February and March.
However, the property market still faces heavy pressure, which is evident in the government's land sales.
The most notable of these were the tenders for a hotel site in Ma On Shan and residential land in the former police quarters on Canton Road. The Ma On Shan hotel site, covering approximately 86,000 square feet, was originally scheduled to be auctioned in March 1997, but the plan was forced to be postponed due to the need for the Town Planning Board to address objections to the construction of a hotel on the site.
In January 1998, with the property market in a slump, the Hong Kong government opted for a more discreet tender process to avoid impacting market sentiment. Cheung Kong Holdings won the bid for HK$150 million. With a buildable floor area of approximately 602,800 square feet, the land price was just over HK$250 per square foot, making it a "classic" event in Hong Kong's property auction history.
Another plot of land, the former police quarters site on Canton Road, covers approximately 111,000 square feet and is expected to accommodate 1100 residential units. Before the sale, surveyors estimated the land price at approximately HK$5000 per square foot, totaling over HK$5 billion. The Hong Kong government re-released the land through tender. Major developers initially expressed interest, but due to the low-price sale of the Ma On Shan hotel site and various unfavorable market news, developers submitted bids at low prices. Ultimately, a consortium led by Cheung Kong Holdings won the bid at HK$34.93 billion, a land price of only HK$3060 per square foot. Including development costs and a 20% profit margin, the land, once completed in three years, would have a price of HK$7200 per square foot, a full 25% lower than the HK$9800 per square foot price of the less desirable Jazz Garden development in the same area.
This land sale sends a message to the market: the housing market, which has already fallen by more than 3%, may fall by another 3%.
As a result, the "mini-boom" in the housing market that appeared in February vanished in an instant.
Beginning of November.
"My bottom line is 10000 points. We absolutely cannot let the Ping An Index fall below this number! Of course, we cannot rule out the possibility of luring the enemy deeper into our territory and allowing it to briefly fall below 10000 points, or even to 8000 points." In a conference room in the Ping An Bank building, Chen Guangliang gave an order to the 'Five Tigers of the Chen Clan'.
At this point, the Ping An Index fell further to only 13000 points, but it was still some time away from Chen Guangliang's bottom line.
However, it is clear that international speculators have already begun targeting Hong Kong, starting to short Hong Kong stocks as early as April.
During this period, some Hong Kong investors, unable to withstand the pressure or joining the ranks of short sellers in Hong Kong, sold off their shares.
Chen Wensheng spoke first: "Ping An Investment has HK$800 billion in cash flow, and with the addition of HK$800 billion in reserves from Ping An Bank, it can use HK$1600 billion in cash to protect the Hong Kong stock market."
If outsiders knew, they would probably be shocked to the point of jaw dropping. Just one "Chen Tiger" is comparable to "half of the international speculators".
of course.
Chen Wensheng dared to do this for two reasons: First, Hong Kong was the Chen family's stronghold, and it absolutely could not be lost; second, according to his father and their analysis, Hong Kong's economy was very resilient and its foundation was sound, unlike regions such as Southeast Asia and Japan.
We have been working on developing the port through science and technology and culture for ten years now, and the foundation is very solid.
Chen Wenjie also said, "The Cheung Kong Group will remain optimistic about Hong Kong and will provide support in various fields. If necessary, it can also use more than HK$10 billion to enter the securities market."
The Ping An Index, which started at 20600 points, now has a target of 10000 points, which is equivalent to a drop of half.
But it's clear that Hong Kong's economy shouldn't have fallen that much; 40% is the limit, and it will recover quickly.
Therefore, maintaining the '10000-point mark' is not a pipe dream, but rather an unwavering bottom line.
Subsequently, Chen Wenming, Chen Wenkai, and Chen Mengyi all stated that they could contribute a total of over 400 billion yuan in cash flow to support the securities market.
Of course, apart from Ping An Group, the other four group companies will not easily enter the securities industry to avoid overlap of family businesses.
Chen Wensheng added, "If it falls to 10000 points, I will start to tentatively enter the market, which will also lure the enemy in. When necessary, I will contact my brothers and sisters."
“Alright. The Hong Kong government is very determined, and we also have foreign exchange support from the mainland. This time, our family will act as the ‘mysterious force’!” Chen Guangliang said with relief.
In its previous life, the Hang Seng Index fell from 16600 points to 6600 points, a drop of 6%.
In early May, 88-year-old Chen Guangliang became a father again, with Li Jiaxin giving birth to their second son and Li Jiaming giving birth to a daughter.
Of course, Chen Guangliang would not visit them in the hospital, and he would not even meet with them in the near future.
"I went to see it, and it's definitely Mr. Chen's child!" On the 'Tranquility' superyacht, Guan Jiahui sat seductively in Chen Guangliang's lap, her breath sweet as orchids. She wore a pink halter dress, and the glimpse of her cleavage was breathtaking. This woman had a figure she had never had in her previous life, and her skin was even whiter and more delicate.
Of course, Chen Guangliang had gotten to know her well, and was familiar with every inch of her skin. In addition, due to his age, he wouldn't be tempted so quickly.
However, holding the still young Kwan Ka-wai is indeed refreshing.
"Nonsense! When have I ever doubted myself!"
Guan Jiahui covered her mouth and laughed. She had already figured it out, so she said, "Of course your body is fine. I'm just worried that the two of them want to have a child, but you don't agree, so they might take a risk."
Chen Guangliang didn't take the 'joke' to heart. If he were to dwell on such things every day, he would find life boring.
As his hands roamed over Guan Jiahui's youthful body, he felt as if he too longed to return to his own youth. He wondered if he was getting old, but Chen Guangliang found himself reminiscing about his younger days, even if those days were filled with war and chaos—though only a fleeting memory.
Guan Jiahui gazed at the man before her, her eyes filled with longing. She didn't regret being with this man, and she was still captivated by this life. She just wanted time to slow down and stay.
Of course, she didn't forget the important matter and asked, "When can we buy at the bottom?" Even in her hospital bed, Jiaxin couldn't help but ask this question.
During this period of high prices, they watched Hong Kong stocks and real estate prices plummet with excitement every day, experiencing a daily climax – a truly exhilarating feeling.
Data shows that by January 1998, the prices of large private housing estates in various districts of Hong Kong, including Taikoo Shing, Heng Fa Chuen, and South Horizons on Hong Kong Island; Whampoa Garden, Laguna City, and Mei Foo Sun Chuen in Kowloon; and Sha Tin First City, Green Willow Sun Chuen, and Kingswood Villa in the New Territories, had all fallen sharply from their highs in the second quarter of 1997, with the decline generally exceeding 30%. Most of them had returned to the levels of early 1996, which was equivalent to the peak in the first quarter of 1994.
More than three months have passed, and the property value has dropped further.
By May, the property market was experiencing a series of declines, and the overall economy was deteriorating, with the GDP in the first quarter recording a negative growth of 1.2%.
"Tear"
Chen Guangliang tore Guan Jiahui's sundress, revealing her flawless white body. He then made Guan Jiahui lie on the coffee table, and a young maid dressed in a maid's outfit placed snacks on her.
They're really going wild!
Of course, at least they won't go too far.
As Chen Guangliang savored the wine and snacks, he looked at Guan Jiahui, whose face was flushed, and said, "I'll let you know. Anyway, it's not the right time yet; the price will drop further!"
I won't tell these women beforehand, since it concerns the entire family's bottom-fishing operation. I'll inform them of the specifics later.
When he saw the young and beautiful maid bending over in front of Chen Guangliang, placing the snacks on Guan Jiahui's body, revealing her black stockinged thighs and graceful buttocks.
Chen Guangliang reached out his groping hand.
The maid trembled slightly, but did not resist. Instead, she deliberately slowed down her movements to give him time.
Guan Jiahui naturally saw this scene, but pretended not to.
As Chen Guangliang's hand went deeper and deeper
Afterwards, Chen Guangliang sighed, "His sword is still sharp, but he doesn't draw it out easily!"
Guan Jiahui lay on the sofa, looking at the maid on the floor, and laughed, "Be careful not to cause trouble."
The maid quickly said, "Sir Chen, Miss Guan, I won't say or do anything wrong."
Having been on board for so long, she knew the rules of the ship well—be obedient. On this ship, Sir Chen was the king.
Chen Guangliang clapped his hands, and soon Ah Hong walked in. She was forty years old and had never married. She was currently a manager on the yacht. She had relatives in Hong Kong, and her two younger brothers were living comfortably with her. In the future, her nephews would take care of her in her old age.
"Put your clothes on and come with me."
"Yes, manager."
Before long, the young maid was given a moral lesson and was given a house in Hong Kong, along with better treatment. She was recruited from the mainland to Hong Kong, and this would change her family's fate.
After helping Chen Guangliang tidy up everything, Guan Jiahui sighed to herself, "Are you tired of us?"
"Don't overthink it. It's just that I need a little atmosphere now and then! I'm not senile yet!"
Guan Jiahui immediately beamed with joy. As long as no new people were added, it was fine as long as they were just playthings, since this wasn't the first time.
As for Chen Guangliang himself, he doesn't care about anything else. He has been retired for seventeen years, and how many years does he have left in his life? What's wrong with indulging a little now and then?
That girl, who was only 20 years old, was exactly the kind of spiritual nourishment he needed.
By the end of May, the Ping An Index had fallen to 11200 points, a drop of 1900 points in just one month.
Starting in April, international speculators moved to Hong Kong, causing the Ping An Index to fall from a high of 14200 points, a drop of 3000 points in two months.
But clearly, the real show is just beginning. International speculators want to drive the Ping An Index down to at least 8000 points, or even lower.
In light of the drastic fluctuations in the Hong Kong economic environment both domestically and internationally, the Hong Kong government has introduced a series of measures to address the property market and the shortage of funds. These measures include extending the pre-sale period for unfinished properties from 15 months to 20 months before completion, exempting luxury homes exceeding HK$1200 million from the lottery requirement, temporarily lifting four restrictions on resale of unfinished properties and speculation by corporate buyers, and simplifying mortgage programs for residential properties so that banks can accurately determine the amount of liquidity available to formulate loan plans. The Hong Kong government stated that the purpose of these measures is to avoid a "hard landing" for the property market.
However, the property market situation showed no signs of improvement. On June 23, the government originally planned to auction two plots of land in the New Territories, but due to the weak market at the time, real estate professionals generally demanded that the government freeze land sales. Instead, the government suddenly announced nine measures to alleviate the financial burden on the people, including increasing the HK$42 billion reserved for "first-time homebuyer loans" in the 1998/1999 fiscal year to HK$84 billion.
The government hopes to increase the number of eligible households from 6000 to 12000; increase the number of "home purchase loans" from 4500 to 10000; and waive rates for the fourth quarter of the year. Most notably, this measure immediately halts land sales for nine months. Industry insiders estimate that this alone will reduce government revenue by HK$23 billion.
The Hong Kong government's series of measures have begun to stabilize the small and medium-sized residential property market. Clearly, the government's aim is twofold: to stabilize the property market and to prevent a collapse that could cripple the banking sector and destabilize the Hong Kong dollar's linked exchange rate. As Professor Yu-Ching Yau, a financial expert at the University of Hong Kong, pointed out: "If the property market were allowed to plummet further, it would endanger banks and the Hong Kong dollar, something international speculators would welcome. Knowing that a direct attack on the Hong Kong dollar would not succeed, they have instead adopted a roundabout strategy of 'crashing the property market and dragging down the banks,' ultimately overturning the linked exchange rate system. This conspiracy is quite insidious." (End of Chapter)