"Wei Dong, buy 1 million shares of TCG for HK$125!"
On October 21, the bad news that Taiwan's stock market plummeted 301 points was widely spread by the Hong Kong news media. The rumors were so bad that investors in Hong Kong were frightened and came to the securities business hall early, anxiously waiting for the opening of the Hang Seng Index.
Li Guoming, general manager of HSBC Securities, shouldered the heavy responsibility of personally trading and issued instructions to trader Wei Dong to try the power of short selling in the stock market?
The Hang Seng Index opened at 13052.1 points, opening 81.1 points higher!
Investors in Xiangjiang see a glimmer of hope!
After the market closed yesterday, Financial Secretary Joseph Tsang, Chief Executive of the Hong Kong Monetary Authority Yam Chi-gang and Director of the Financial Services Bureau Hui Shi-yam discussed the matter and then reported to the Chief Executive of the Hong Kong Special Administrative Region, Mr Tung Hua, who was visiting the UK.
It is recommended to use 10 billion Hong Kong dollars in reserve funds to hand over to the Hong Kong Stock Exchange and entrust it to local securities companies to purchase 33 constituent stocks of the Hang Seng Index to raise the Hang Seng Index; the Hong Kong Monetary Authority uses 20 billion Hong Kong dollars in reserve funds to buy Hong Kong dollars in the foreign exchange market, and then Depositing the purchased Hong Kong dollars back into the bank will build up the confidence of Hong Kong investors that they are about to collapse, and prevent international speculators from continuing to short the Hong Kong dollar exchange rate and Hang Seng Index futures.
Chief Dong agreed with everyone's suggestions.
Ren Zigang will purchase 33 constituent stocks of the Hang Seng Index and entrust the task of raising the Hang Seng Index to Huang Jinping, President of the Hong Kong Stock Exchange.
Huang Jinping entrusted 10 billion Hong Kong dollars in rescue funds to nine local securities companies in Hong Kong, including HSBC Securities, Standard Chartered Securities, Sun Hung Kai Securities, Peregrine Securities and HTIC Securities, and signed a securities investment confidentiality agreement.
Under the leadership of Chairman Wang Dongming, HTIC Securities Company has grown into the fifth largest local securities company in Hong Kong after more than three years of rapid development, with 11 securities business departments.
Sun Hung Kai Securities is a securities company founded by Feng Jingxi in 1969 and listed on the Hong Kong Stock Exchange in 1975.
Before Li Zhaoji founded Henderson Land, he founded Sun Hung Kai Properties with Guo Desheng and Feng Jingxi. The three were known as the Three Musketeers of Real Estate.
In 1972, after Sun Hung Kai Properties was listed, Feng Jingxi left Sun Hung Kai Properties and established Sun Hung Kai Securities Company to enter the Hong Kong financial market.
After Feng Jingxi died of a sudden cerebral hemorrhage in 1990, his son Feng Yongqiang inherited the family assets.
Heung Kong Exchanges and Clearing Limited (HKEx) is one of the world's major exchange groups and a Hong Kong-listed holding company (). It operates independently and is responsible for its own profits and losses.
Hong Kong Exchanges and Clearing Limited operates exchanges in Hong Kong and London. Its members include Heung Kong Stock Exchange Limited, Heung Kong Futures Exchange Limited, Heung Kong Central Clearing Company Limited, Heung Kong Stock Exchange Options Clearing House Limited and Heung Kong Futures Clearing Limited. , also includes the London Metal Exchange (LME), the world's leading basic metals market.
The SAR government is the single largest shareholder of the Hong Kong Stock Exchange, holding 5.88% of the shares.
"Jones, sell 1 million shares of TCG for HK$120; sell 1 million shares of HSBC for HK$75; sell 1 million shares of Standard Chartered Bank..."
"Okay, boss!"
…
The opening point was the highest point of the day. In less than 5 minutes, a surge of selling closed the gap. The Hang Seng Index fell all the way. At 9:45 minutes, the market broke through the 12899.8 points set on September 2, and the market panicked. gushed out, with the lowest reaching 12353.1 points. The market closed at the lowest point of the day at 12403.1 points, down 567.8 points, or 4.38%.
Shrinkage plummets!
On that day, nearly 10 European and American investment banks and hedge funds simultaneously launched a massive attack on the Hong Kong currency market, stock market and Hang Seng Index futures market, selling Hong Kong dollars crazily and shorting Hang Seng Index futures.
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On October 22, the Hang Seng Index closed at the lowest point of the day at 11637.8 points, a drop of 765.3 points, a plunge of 6.17%!
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On October 23, the Hang Seng Index closed at the lowest point of the day at 10426.3 points, down 1211.5 points.
points, plummeting 10.41%!
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Affected by the sharp depreciation of Taiwan's currency and the slump in the stock market, the Hang Seng Index fell from 13,601 points to 10,426, 3 points, or 3,174.7 points, a plunge of 23.34% in just 4 trading days!
The stock market value of more than 800 billion Hong Kong dollars was lost!
While the Hang Seng Index plummeted, starting from October 20, international hot money led by Soros began to frantically short-sell the Hong Kong dollar, causing violent turmoil in the Hong Kong currency market. The spot exchange rate of the Hong Kong dollar quickly fell below the predetermined warning line of 7.75:1, reaching one level on the 23rd. dropped to a new low of 7.8:1.
Faced with the severe financial situation, the SAR government authorities decided to use HK$30 billion in reserve funds to continue to purchase 33 constituent stocks of the Hang Seng Index in order to increase the Hang Seng Index and prevent international speculators from continuing to short the Hang Seng Index futures.
Ren Zigang once again resorted to "raising interest rates and raising interest rates" to respond.
While buying the Hong Kong dollars that speculators were selling, they simultaneously tightened money supply, tightened loans to banks in Hong Kong, and raised borrowing costs. This trick was used by the Hong Kong Monetary Authority against international speculators twice, and it worked twice.
On the one hand, the Exchange Fund sells U.S. dollars in the market to absorb Hong Kong dollars; on the other hand, it announces an interest rate increase, with the prime rate increased from 8.75% to 9.5%. These measures achieved obvious results in the foreign exchange market, and the Hong Kong dollar exchange rate immediately rebounded to a high of 7.5:1 and remained relatively stable for a period of time.
While buying the Hong Kong dollars that speculators were selling, they also tightened money supply and tightened loans to banks in Hong Kong, raising borrowing costs.
In order to avoid attacks on the Hong Kong dollar and raise the cost of speculation, the Hong Kong Monetary Authority announced that it will no longer use the official discount rate of 6.25% to provide funds to banks that borrow too much, but will adjust funds at a punitive interest rate according to the situation.
This decision led to a sharp rise in interbank market interest rates, which once soared to 300%.
When meeting with the media, Tsang Ying-kuen said that maintaining the linked exchange rate is the Hong Kong government's primary goal. To achieve this goal, interest rates will soar. He emphasized that the Hong Kong dollar is currently at its strongest level in history. Hong Kong's basic economic factors are good and the stock market has fallen. Mainly due to the temporary speculative influence of external factors, investors do not need to panic.
Chief Executive Tung Hua, who is visiting the UK, stressed before leaving London that the SAR government is determined to maintain the linked exchange rate.
Financial Secretary Tsang Ying-kuen and Director of the Financial Services Bureau Hui Shi-yam met with Chinese and foreign media reporters and reiterated that maintaining the linked exchange rate is the Hong Kong government's preferred goal. To achieve this goal, it is inevitable that interest rates will rise. They hope that the people of Hong Kong will be calm and not impatient.
Chief Secretary for Administration Chan Fong-sang called on all residents of Hong Kong to remain calm.
The Hong Kong General Chamber of Commerce issued a statement supporting the linked exchange rate system.
"I don't think this is a stock market crash!"
On the evening of the 23rd, Tsang Ying-kuen told the Hong Kong media that no matter what, the SAR government must first defend the exchange rate of the Hong Kong dollar. Although there was speculation in the Hong Kong dollar the night before, the speculation had been subsided by this time.
"Last night, the Hong Kong Monetary Authority had fended off international speculators."
Ren Zigang delivered a speech on the morning of the 24th.
