The birth of the Hong Kong Island family

Since May, Hong Kong's stock market and real estate have entered a stage of adjustment. There are two main reasons: first, the Hong Kong government's measures to crack down on the property market have become increasingly fierce; second, there have been constant disputes over "political reform" and constant quarrels between China and the UK.

The Hang Seng Index reached a high of 13,000 points at the beginning of the year, but fell to 8,000 points by the end of the year, and the stock market entered a bear market.

In terms of real estate, prices also fell by 15 to 30%.

Under this circumstance, Cheung Kong Group took the lead in reducing prices, reducing the price of Bayshore Garden in Shatin by 17%, selling it at HK$4,500 per square foot. More than 800 residential units were sold on that day.

Subsequently, Henderson and Sun Hung Kai lowered their prices one after another, indicating that the Hong Kong property market has entered a downward trend.

Of course, there are also real estate developers who are unwilling to ‘beat up the market’, such as New World Development, Hang Lung, etc., so they sell at a fair price.

This marks that the development of Hong Kong's real estate market has entered a situation of "three countries competing for hegemony" - Cheung Kong, Sun Hung Kai, and Henderson have further monopolized the Hong Kong real estate market. Because other real estate companies have weak funds and do not have sufficient land reserves, they are unable to participate in this kind of competition. This also indirectly results in the lack of capital circulation, and eventually they fall further behind.

A New Year Comes (1995).

Lin Zhichao and Lin Benfeng came to Singapore Hengfeng Investment Department, the original overseas investment department of Overseas Trust.

Hengfeng Bank inherits Hang Lung Bank, Overseas Trust Bank, especially Overseas Trust Bank, so it has many branches overseas, as well as an investment department built by Lin Zhichao himself.

This investment department made huge profits during the oil crash (end of 1985) and the bursting of the Japanese stock market bubble (end of 1989). As for other events, Lin Zhichao greatly reduced the capital he could use and left it to his subordinates to operate. It doesn’t hurt no matter how much you make or lose!

"BOSS, President Lin, you are welcome to inspect our work!" The investment department of Hengfeng (Singapore) is an American named Willy, who is good at the Nikkei Index.

After the Nikkei Index fell to 25,000 points in 1990, Lin Zhichao handed over investment authority to his team. Of course, the capital amount was only 100 million US dollars. Although it seems to be quite a lot, in fact, when doing venture capital, you can't have a full position. Otherwise, if something happens, you will have to be out without new guarantee money.

Lin Zhichao held Willy's hand, then patted him on the shoulder and said: "Willy, from now on, Hengfeng Bank is preparing to spend 500 million pounds to short the Nikkei 225 futures. You Singapore Investment Department will do it every day Get £10 million and go short the pound."

He remembered that Barings Bank collapsed in 1995. The reason for the collapse turned out to be that a 28-year-old young man was long the Nikkei Index 225, which caused the collapse of this British bank with a history of more than 200 years. The main reason why this young man lost was that the Great Kobe Earthquake was about to occur in Japan. This real estate took away the lives of more than 5,400 people in Japan and 100 billion U.S. dollars of wealth.

Willy suddenly became excited. He had been with BOSS for ten years, and of course he knew that every time BOSS paid attention to this investment department, he planned to do something big.

However, he quickly hesitated and said: "BOSS, the Nikkei Index 225 is currently at 19,880 points, which has dropped 1,000 points from last year's peak of 21,000 points, so the market is generally optimistic about the rise."

Although Japan suffered from a bubble burst, it is the world's second largest economy after all. What's more, the Japanese economy essentially does not have much impact, and those affected must be speculators.

Moreover, Japan's stock market and real estate are relatively strong. You must know that the rent of office buildings in Central, Hong Kong, only exceeded that of Tokyo, Japan last year, which shows how expensive Japanese real estate was back then.

Lin Zhichao said: "I am more optimistic about falling to 15,000 points, so we will start shorting this year!"

Seeing Lin Zhichao's confident look, Willis stopped trying to persuade him. After all, this BOSS was very legendary.

"No problem, I'll start executing your orders right away!"

Lin Zhichao nodded, and then said to Lin Benfeng: "Remember to send 10 million US dollars from Hong Kong to their investment department every day!"

Of course, the money is not given in one go, but requires regular payments from Hengfeng Bank.

Lin Benfeng replied: "No problem, I will arrange it!"

Hengfeng Bank seems to have been entrusted by Lin Zhichao to Lin Benfeng and Sanders, but in fact Lin Zhichao is still very concerned about it.

At present, this bank has developed into a large bank with net assets of HK$50 billion. It has surpassed Bank of East Asia and is a large Chinese bank second only to Hang Seng Bank. In terms of deposits, it even exceeds Hang Seng Bank, because a large part of Lin Zhichao's personal deposits are deposited in Hengfeng Bank.

This time.

Hengfeng Bank's short-selling of the Nikkei Index is not only to make a fortune, but more importantly, to acquire the British bank Barings, which has been in business for more than 200 years.

Barings Bank is considered an investment bank (with only a small amount of commercial deposits) and manages approximately US$30 billion in wealth. If Lin Zhichao acquires this bank, he can create a truly 'large investment bank'.

By then, the Lin family can use the funds managed by Barings Bank to buy commercial real estate and stocks in Europe and the United States, and gain a firm foothold in this circle.

When Lin Zhichao does this, he is actually thinking about the third generation of the Lin family. His grandson will definitely produce some financial talents.

Half a month later (1.17), a major earthquake broke out in Kobe, and then the Nikkei 225 began to decline.

Just one week later, the Nikkei Index fell to 18,500 points, completely interrupting the rising momentum of the Japanese stock market. Instead, it has fallen by about 10% from its highest point at the beginning of the month.

Barings Bank, Trading Department, Singapore.

Futures manager Nick Leeson was like a gambler at this time and continued to buy Nikkei futures in large quantities. He now has access to 10 million pounds in funds from London every day.

Last December, at a Bahrain financial results conference in New York, 250 Bahrain bank workers from around the world regarded him as a hero of Bahrain and gave him a long and warm applause.

This fuels ambitions to make more money for Barings.

Although the Kansai earthquake caused him a lot of losses, he believes that more than a week has passed and the Nikkei index has not plummeted, so it will definitely bottom out and rebound.

"I want to make a lot of money!" Nick Leeson shouted in his heart.

He is only 28 years old this year, but he is already a world-renowned investment banking manager and a hero of Barings Bank. He is not allowed to fail, so even if he has incurred a lot of losses in the Nikkei Index, he always has this idea in his mind - as long as he increases his position, he can definitely turn defeat into victory.

A trader's voice came: "Manager, someone is selling a lot of shorts. Do you want to take the order?"

Nick Leeson said without hesitation: "Take it, give it all to me. We have 10 million pounds a day, and the Nikkei index will rebound soon. Let those fools jump off the building at a loss!"

The traders have no doubts about him, and the manager is Bahrain’s hero.

Nick Leeson asked: "How many Nikkei futures and Japanese government bond contracts do we have?"

One trader said: "We already have 50,000 Nikkei futures and 20,000 Japanese government bond contracts."

Nick Leeson smiled arrogantly and said: "Very good, the more we buy, the more we make! Once this is done, I will give you a holiday and go to Las Vegas for a week of fun." , one American girl a night.”

"Thank you, manager!" Several traders said happily, and then started to operate like chicken blood.

Nick Leeson was not completely confident and excited at this time, but more of a kind of madness, and behind this madness was the fact that in 1992 he set up a ' 88888's 'wrong account'. This was originally a normal 'error account' in the operation of the financial system, recording minor errors and handling them in Singapore to avoid trouble in London.

It was this 'wrong account' that led to today's irreversible situation. At first, his subordinates made a mistake in the client's transaction, and he recorded the mistake in the 'wrong account' (concealed it), resulting in a loss of 20,000 pounds; later, his A friend also made many mistakes, which he recorded in his 'error account'.

But at least three questions troubled him: first, how to make up for these errors; second, how to avoid the end-of-month internal audit of the London headquarters after recording the errors into the "88888" account; third, SIMEX asked them to increase margin every day, and they would calculate How much does the Singapore branch lose every day?

In order to make up for the mistakes of his employees, Leeson transferred the commissions he earned into his account, but the premise was of course that these mistakes should not be too big, and the amount of losses caused should not be too big, but the mistakes caused by George were indeed too big. In order to make enough money to recoup all his losses, Leeson took increasing risks and engaged in a large number of straddle trades. Because the Nikkei index was stable at the time, Leeson would earn option premiums from many trades. If you are unlucky and the Nikkei Index moves violently, this transaction will cause Bahrain to suffer huge losses.

In this way, he started to fill in the holes and started making fake checks to pay the London headquarters, and finally got to where he is today.

"I've made a lot of money this time, so I'll stop!" Nick Leeson thought after calming down.

The other side.

Hengfeng Bank, the investment arm of Singapore.

"Manager, there are large buying orders in Tokyo and Singapore. It seems that Bahrain Bank is buying!" his subordinate reported to the side.

Willy smiled, the other party was out of control!

"What a bullshit hero of Barings Bank. I think it is at the end of its rope now. We continue to earn 10 million US dollars every day. Anyway, we have already made a lot of profits."

"Okay, let's keep buying!"

Prior to this, Hengfeng Bank had bought US$200 million in Nikkei futures, and this time Hengfeng Bank spent US$1 billion to short the Nikkei futures. Of course, it is impossible to short one billion U.S. dollars at once. After all, futures are gambling in nature, and at least 500 million U.S. dollars must be set aside as reserve funds.

Willy nodded, and then said encouragingly in the office lobby: "Brothers, cheer up, we have caught a big fish this time! Do you want to take a vacation?"

"think"

"I miss you so much!"

Willy smiled and asked again: "Do you want to get a high bonus?"

"think"

“Dream of it”

Willy said encouragingly: "Now you don't have to dream. As long as this project is successfully completed, I will fight for you whatever you want!"

“Thank you manager”

"Long live the manager"

Willy smiled and said: "Long live the boss! Let's do it!"

Afterwards, everyone got busy. After all, with a short selling order of 10 million US dollars a day, he was considered a top player.

On February 23, Leeson's efforts to influence the market direction completely failed. Nikkei's stock price closed at 17,585 points, and Leeson's long risk position in Nikkei futures has reached more than 60,000 contracts; its Japanese government bonds have fluctuated in price all the way. On the occasion of the rise, its short risk position has also reached 26,000 contracts.

The losses caused by Leeson to Bahrain, while Bahrain's senior executives were still dreaming of dividends the next day, finally reached a high of 860 million pounds (about 1.4 billion U.S. dollars), causing the world's oldest Bahrain Bank to Final destiny.

Just three days later, the Bank of England, the British central bank, announced that Barings Bank would no longer be able to engage in trading activities and would apply for asset liquidation.

At this time, Lin Zhichao also appointed Lin Benfeng and Sanders to contact the Bank of England with the intention of acquiring Barings Bank.

As for the price, of course it is only 1 pound. More importantly, it is more important to discuss the specific conditions.

In recent years, Lin Zhichao has also begun to increase his influence in the financial world and become a financial tycoon. Especially on the eve of OPEC's production increase, the battle between Lin Zhichao's family and the European Rothschild family made Lin Zhichao famous.

Of course, Lin Zhichao knows that the financial field is very deep, so he has always been very cautious and will not give any opponent an opportunity to take advantage of him.

For example, when shorting the Nikkei Index this time, the daily shorting amount is 10 million US dollars. The short selling for two consecutive months is not a one-time large-scale entry. This way, it is very safe. There is no need to worry about the sudden surge and fall of the Nikkei Index 225.

In fact, for a prophet like Lin Zhichao, he is naturally confident. But on the other hand, Barings Bank's Leeson still chose to buy the Nikkei Index after the "Kobe Earthquake". I have to say that his mind is not working well.

Of course, this has nothing to do with Lin Zhichao. At this time, he began to seek the acquisition of Barings Bank.

Barings Bank was founded in 1763 by Sir Francis Barings. Due to its flexible and innovative operations, Barings Bank soon achieved great success in the international financial field. Its business scope is also quite wide. Whether it is refining copper ore in the Congo, trafficking wool from Australia, or digging the Panama Canal, Bahrain Bank can provide loans for it.

Bahrain Bank is different from ordinary commercial banks in that it does not develop ordinary customer deposit business, so its funding sources are relatively limited. Its business expertise is corporate financing and investment management. In the 1990s, it began to develop overseas and carry out extensive investment activities in emerging markets. In 1994 alone, it opened offices in China, India, Pakistan, South Africa and other places. Its business network is mainly in emerging countries and regions in Asia and Latin America.

With the addition of Bahrain Bank, the Lin Zhichao family's investment channels were immediately opened.

At the same time, the US$30 billion in assets managed by Barings Bank is also valued by Lin Zhichao, which is equivalent to a lot more personal connections.

There are only ten days to acquire Bahrain Bank. If no buyer is found after ten days, Bahrain Bank will need to enter bankruptcy. And within ten days, if someone completes the acquisition, then there is no need to go bankrupt.

Barings Bank was useless to large financial institutions, so in the end only two financial groups expressed their willingness to acquire it, one was ING and the other was Octopus Financial Group.

Lin Zhichao's personal relationships in the UK mean that there are no political barriers to acquiring such a company; so in the end, whichever of the two companies interested in acquiring the company has better conditions will be the winner!

The conditions of Octopus Financial Group are: 1. Buy Barings Bank at a symbolic price of 1 pound; 2. Inject 800 million pounds into Barings Bank and resume normal operations immediately; 3. Bahrain Bank’s brand name will not only be retained, but will continue to flourish. ; 4. There will be no layoffs or relocation of the headquarters (temporarily).

As for ING, there are many things to consider. They already have a signature investment bank, and the acquisition of Barings Bank is more of a business acquisition; secondly, they will not inject so much capital.

Finally, in a Bank of England conference room, the final vote was taken.

Beforehand, some directors expressed doubts: "It is true that Lin Zhichao is a shipping king and a real estate tycoon, but his influence in the financial industry is rarely heard of!"

His question was quickly laughed at by other directors!

"That's how ignorant you are! Lin Zhichao was shorting oil, fighting against the Rothschild family, and ultimately made a fortune. I heard that a lot of Canary Wharf's funds came from that investment."

"Lin Zhichao is not only good at career, but also good at financial investment. He is a real world businessman, I have to admit it!"

Thinking about it, if we compare the current businessmen alive, there is no one in the world who can compare with him. The simplest truth is that Lin Zhichao not only started from scratch, but is also a dominant player across many industries. These two points are the most difficult to do.

After such a start, the Board of Directors of the Bank of England quickly decided to sell Barings Bank to Lin Zhichao.

After all, the conditions are too generous!

The successful acquisition of Barings Bank by Octopus Financial Group immediately caused great waves in the world.

A local financial company in Hong Kong actually acquired an established bank in the UK. It is like an Indian becoming the Prime Minister of the UK in later generations.

And the Chinese in Hong Kong cheer again!

And Lin Zhichao's influence is even greater. (End of chapter)