NOVEL WEB Chapter 721: Monday Market Open
"The market is about to open."
The 16th typhoon of this year has passed, yet a cloud of anxiety still hangs over every investor in the Hong Kong stock market.
For the past two days over the weekend, the media have been reporting on Beibijia's havoc, and aside from one clarification from the Financial Management Office, no other news has emerged.
No news is the most negative news, implying that the Hang Seng Index is highly likely to drop to levels before Tianxing Quantitative came to Xiangjiang.
Previously at 23,800 points, now at 24,808 points, even not including the chain reactions from Lu Liang's short selling, there's at least a 1,000-point drop.
Meanwhile, Lu Liang finished his morning workout and arrived at the 82nd floor of Phase 2 of Plaza Building before nine in the morning.
"Can everyone hear?"
Lu Liang took the office headset from Li Junwei, testing the communication tools as he walked.
"Received." "Received." "Received."
The voices of Sun Yutao, Liang Wenhu, and Wen Chao echoed in the headset.
When a lion hunts a rabbit, it must exert its full strength, much less HSBC Bank, which isn't a rabbit anyone can easily slaughter.
Their actions must be swift; once their intention is discovered, HSBC will undoubtedly take countermeasures.
If drawn into a prolonged battle, although Lu Liang can fight, it would be a poor choice, letting others reap the benefits.
"Synchronize with Beijing time, first calibrate, then report available funds and position information."
Lu Liang entered the office, instructing Li Junwei to stand inside the door and Xu Jiawei outside, refusing any disturbance.
Sun Yutao took a pause and spoke first, "Mr. Lu, Tianxing Private Equity has 13.8 billion US Dollars available, position funds at 2.3 billion US Dollars."
Last Friday, while it was the best moment to cash out, the undisguised selling method revealed their intentions to many southbound funds, sparking a wave of following suit.
In the morning, over 20 billion US Dollars were realized, but by the afternoon, the cash-out funds were less than a fifth of the morning, thus leaving 2.3 billion US Dollars in base position funds.
"Tianxing Quantitative has 2.8 billion US Dollars available, position funds at 15.8 billion US Dollars." Liang Wenhu followed closely, though he was in the office next to Lu Liang, he still communicated electronically.
The initial fund for Tianxing Quantitative was 20 billion US Dollars, with 3 billion for reserves, not to be touched unless in life or death situations.
Last Friday, for shorting Hong Kong stocks, 17 billion US Dollars were invested, and as of now, if they successfully close their positions, a profit of 1.6 billion US Dollars could be secured.
Finally, Wen Chao spoke, "Xingheng Investment has 8.1 billion US Dollars available, position funds at zero."
Tokyo Xingheng Investment's current total assets should exceed 16 billion US Dollars, but they have hoarded about 1.62 million Bitcoin, worth over 7.8 billion US Dollars, and recently they're acquiring Fuji TV and looking for suitable commercial investment banks to purchase.
Thus, their total available funds are the least among the three.
As Wen Chao finished speaking, except for Lu Liang, the other two, including Wen Chao himself, felt uneasy.
The available funds of the three, including the position funds pre-invested in the market, theoretically, the amount they could mobilize in the Hong Kong stock market had reached 40.7 billion US Dollars.
400 billion US Dollars is equivalent to 280.8 billion RMB, also equal to 317.4 billion Hong Kong Dollars.
If they remembered correctly, last year Forbes revealed in the billionaire list, the Jack Ma family's total assets were merely 40.4 billion US Dollars, even the first, acclaimed as the First Rich of the nation, Hengtai Old Xu had only 44.3 billion US Dollars.
Forbes calculated by assessing the value of held shares, once they sell off the Ali Penguin or Hengtai's shares, the value of shares could be halved.
Contrastingly, Lu Liang could mobilize 40.7 billion US Dollars in liquid funds without major impact.
Once this news spreads, fear might prevent many industry leaders domestically and internationally from sleeping.
For ordinary people, there's no difference between millions and billions in funds, just larger numbers.
It's like a calf unafraid of a tiger.
But the bigwigs know the power of such a huge fund in one person's control, equaling the destructive potential of a nuclear button.
Moreover, Tianxing Private Equity's fourth phase has settled a few months ago, with numerous investors eagerly awaiting news on Tianxing Private Equity's fifth phase.
If Lu Liang gives the nod, raising an additional 100 or 200 billion US Dollars wouldn't be a difficult task.
By then, a fund size of 500 or 600 billion US Dollars could stir storms in any market.
Such a massive amount of money targeted at a single company, if the company isn't backed by a similarly sized financial consortium, would be as easy as crushing an ant.
"Hold Xingheng's funds, Yutao, collaborate with Wenhu, first assist the Quantitative Fund in closing short positions."
Lu Liang sipped herbal tea from a thermos, turned his chair to face the window, and at 400 meters high, overlooked Xiangjiang.
No good news over the weekend is the biggest negative news, and once the Hong Kong stock market opens, surely there would be a flash crash.
Tianxing Quantitative must seize this flash crash to close the 15.8 billion US Dollars of short positions held.
15.8 billion US Dollars is 1,232.4 billion Hong Kong Dollars. Even using quantitative trading, it took three hours last Friday.
To seize the opportunity of a flash crash for closing positions, additional funds are needed to suppress the market, preventing a rebound.
Although shorting Hong Kong stocks is merely a tactic, not the ultimate goal, Lu Liang won't let the cooked duck fly away.
With tasks delegated, Lu Liang and Wen Chao chose silence, leaving only the voices of Sun Yutao and Liang Wenhu in discussion in the headset.
"Mr. Liang, the fund size of Quantitative is too vast, best not to participate in the pre-market trading for the first fifteen minutes. Here at Private Equity, we still have some position funds; we'll sell off half positions first inducing market panic, then you guys quickly repurchase once trading begins."
Sun Yutao, with clear thought, quickly devised a simple strategic deployment.
Recently, he had fought alongside Liang Wenhu, forming a combat friendship, knowing Liang Wenhu was adept with technology, but not yet familiar with the procedures for market misguidance of investors.
Therefore, he took the lead to guide Liang Wenhu, teaching him hands-on when would be the best moment to utilize quantitative repurchasing.
Lu Liang revealed a satisfied smile, waiting until the discussion was over before asking, "Wen Chao, do you have any better ideas?"
"No, Mr. Sun's deployment is quite rational, but actual implementation will depend on post-market opening situation." Wen Chao replied.
Lu Liang hummed in response, "Wait for the market to open."
Hong Kong stocks, like Big A, have pre-market trading, although Hong Kong's trading hours are longer, as is pre-market trading.
From nine o'clock, pre-market trading begins, rules are the same: only input buy/sell orders; orders cannot be canceled.
The reason Sun Yutao suggests waiting fifteen minutes is that trading volume in the first fifteen is too small, easily hijacked at the last minute.
Moreover, guiding market emotions requires a step-by-step approach.
Although no good news over the weekend implies negativity, stock markets are casinos, shareholders are gamblers, unwavering till the worst comes.
After all, losses were huge on Friday, despite earnings shown on accounts, unwillingness lingers, no one wants their gains sliced.
Sun Yutao is conjuring a facade, even though good news didn't emerge over the weekend, Monday's market may not be that bad.
First let them harbor slight hope, and as the opening approaches, drive them to despair.
Then, upon market opening, they'll panic, sell off indiscriminately.
In this way, the Quantitative Fund could close positions swiftly, at minimum cost, moving profits securely, enabling Lu Liang to proceed with his plan.
As nine o'clock came, the Hong Kong market commenced the thirty-minute pre-market trading.
Three main indices fell collectively, yet the anticipated stock disaster did not seem to arrive.
"Have Lu Liang's chips run out?"
"Damn, fearing for two days, and this is it? This is it? This is it?"
"I said so, reverse thinking is needed; if everyone thinks it's a Black Monday, then it might go the opposite way."
"Increase holdings, today will definitely rebound and adjust."
"Go go go~~~"
Before nine fifteen, the entire Hong Kong market was thriving, millions of investors cheering jubilantly.
Just as they thought the rumored largest stock disaster post-1997 was just empty threats, lacking endurance.
As the minute hand ticked to fifteen, funds accelerated southward, as if a great terror was looming upfront.
If one doesn't escape now, they won't be able to when the trading begins.
Panic spread again, investors worried Friday's scenario would replay itself.
Massive funds flowed out in following the trend, Hang Seng Index suddenly plunged, in a blink, it dropped from 24,800 points to 24,100 points, down 700 points.
Just before opening,
24,000 points was about to be breached.
A cloud of gloom enveloped countless as if the typhoon's aftermath lingered.
Liao Defa, a taxis driver in Xiangjiang, had been humming tunes waiting for orders, gearing up for his daily target of earning 3,000.
But the next second, upon glancing at the stock market, he shrugged off concerns about parking violations and submitted sell orders at his lifetime's fastest speed.
Today's pre-market trend reminded him of that unbearable Friday.
The morning market gained over a hundred thousand, treated himself to two servings of roasted goose for lunch, yet by afternoon, not only had the profit vanished, but owed ten thousand instead.
He couldn't bear to relive that day's misery...