Reborn in Hong Kong as a Tycoon

Chapter 312 Gold Prices Keep Falling
In the evening, Lin Baicheng came to Hutchison Whampoa.

Lin Baicheng asked secretary Qin Lan to call Peter Wei to the office.

"Peter, how are things going with the Standard Chartered Bank?"

"Mr. Lin, the Hang Seng Index has fallen recently, and the company's stock price has also continued to fall. As of today's close, the stock price has fallen to 37.4 Hong Kong dollars. In addition, we have lost money on long gold futures, so Standard Chartered is now somewhat unwilling to accept it. The fixed increase price is about 35 Hong Kong dollars.”

After Bao Yugang refused, Lin Baicheng approached Standard Chartered Bank, and Standard Chartered Bank was also willing to become the major shareholder of Hutchison Whampoa, so that in the future, Hutchison Whampoa will have more business cooperation with Standard Chartered, instead of choosing to cooperate with HSBC.

Therefore, the two parties negotiated on the fixed increase price, and Lin Baicheng asked Wei Peter to be in charge of negotiating with Standard Chartered.

Although it is said that the fixed increase price is between 33 Hong Kong dollars and 37 Hong Kong dollars, for major shareholders such as Hutchison Whampoa and Lin Baicheng, of course, the higher the fixed increase price, the better, and Standard Chartered definitely hopes that the lower the price, the better. So the two sides have been negotiating.

Standard Chartered is willing to accept a fixed increase of 4000 million shares. Based on the minimum fixed increase price of 33 Hong Kong dollars per share, that is more than 13 billion Hong Kong dollars. Of course, such a large investment cannot be negotiated in two or three days. The two sides negotiated on the price It's been going on for over a week.

However, now that the stock market is getting worse and worse, Hutchison Whampoa’s stock price is also falling. This is because Hutchison Whampoa’s losses in long gold futures have not been exposed, otherwise it will only fall more violently, but Standard Chartered Bank But I know, so Standard Chartered can't accept the previously agreed price range.

In just ten days or so, the international gold price has dropped from around US$200/oz to around US$191/oz, and Hutchison Whampoa’s cost price of US$206.8/oz has dropped by as much as 7.5%. Ten times leverage is 75% , The principal of 1.5 million US dollars lost more than [-] million US dollars.

A large part of Hutchison Whampoa's current stock price is due to Lin Baicheng's investment to make Hutchison Whampoa a huge profit. If Lin Baicheng's investment vision no longer allows Hutchison Whampoa to make money, but instead suffers huge losses, then the stock price of Hutchison Whampoa is simply impossible. There are now so high.

Lin Baicheng asked aloud: "Then what price do they want to increase?"

Wei Peter replied: "They think it should not be higher than 30 Hong Kong dollars per share, and 25 Hong Kong dollars is more reasonable. Although this is a tentative bid, they obviously hope that the fixed increase price will be lower than 30 Hong Kong dollars per share."

"You continue to negotiate with Standard Chartered, but it is still in the price range. If Standard Chartered cannot accept it in the end, then let it go. I will find another third party for the company to fix the increase."

Lin Baicheng said in a deep voice that he has his own funds as the takeover, so there is no need for him to accept a fixed increase at a lower price.Besides, if it really doesn’t work, just let the short seller make a fortune, and when the stock price drops to a certain price, he will let the offshore company buy a large amount of Hutchison Whampoa’s stock.

"Yes, Mr. Lin!"

Wei Peter responded and expressed his understanding.

Afterwards, Lin Baicheng told Wei Peter to leave and called Wei Li over.

Lin Baicheng asked Wei Li if there was any movement from the short side of Hutchison Whampoa, and learned that there was no movement at all from the short side.Neither borrowed stocks from brokers to sell them, nor suppressed the stock price of Hutchison Whampoa, nor bought stocks and returned them to brokers. Since I went short, I have done nothing, which is very Buddhist.

It stands to reason that this should not be the case as a short side.Either choose to suppress the stock price, and only when the stock price keeps falling can you make a lot of money; or you can buy it back after the stock price falls to a certain range, and return it to the brokerage, and you will be safe.

Do nothing after shorting, and let the stock price follow the market. Usually, there is no short side to do this.

The next day was Saturday again, and the time had come to November 11th, and December was about to enter.

Recently, not only the Hang Seng Index is falling, but the international gold price is also falling, and it is about to fall to 190 US dollars per ounce. Compared with last month's high of around 246 US dollars per ounce, it has fallen by nearly 23%, and the correction is quite large. .

However, compared with less than 170 US dollars per ounce at the beginning of this year, the overall price of gold has risen this year, and there are still more than ten points of increase so far.

The fall in the price of gold is actually good for Lin Baicheng, because his leveraged financing of US$7 million principal and US$50 billion is buying more and more as the price of gold falls, so the cost price is lower than expected, only US$198.47 per ounce, which is higher than the original Cost estimates above $200/oz were more than a point lower.

Don't look at it as just one more point. In the case of operating 50 billion US dollars, 1% is 5000 million US dollars, which is definitely not a low amount.

As far as the current situation is concerned, Lin Baicheng has lost money on his gold futures investment by more than three points, which is more than 1.5 million US dollars.Fortunately, this is a temporary loss, and it will rise later, so Lin Baicheng can hold on.

In terms of losses, Lin Baicheng bought gold futures at Goldman Sachs and Bank of Mitsubishi above $210 per ounce, and now it has fallen by nearly 10%.Mitsubishi’s is okay, Lin Baicheng only used five times leverage, and there is a 20% downside, so there is no need to replenish the margin.

Goldman Sachs is different. Lin Baicheng leveraged a principal of US$1 million to finance a long position of US$10 billion. The cost price of the purchase was US$211.6 per ounce. Now it has almost fallen by 10%, and it is close to the liquidation price.

Fortunately, Lin Baicheng will definitely not watch the long positions with a principal of US$1 million being forced to liquidate. Therefore, out of insurance, he increased the margin of US$195 million when the price of gold fell to around US$5000 per ounce, so as long as If the price of gold does not fall below $180 per ounce, he does not have to worry about closing his position.

If the price of gold continues to fall and falls below the price of 190 US dollars per ounce, Lin Baicheng will replenish the margin again when the price of gold falls to 185 US dollars per ounce.After all, he is different from others, he is not gambling, he knows very well how high the price of gold will rise next year.

Also using ten times the leverage, the cost price of Hutchison Whampoa is 206.8 US dollars per ounce, which is not far from the forced liquidation. Lin Baicheng had already asked the company to transfer 5000 million US dollars to the financing account as a margin yesterday. As long as the price of gold does not fall below the price of 180 US dollars / ounce, it will not be liquidated.

In the same way, if the price of gold falls to around US$185 per ounce, Lin Baicheng will replenish the margin again, so that Hutchison Whampoa's long gold futures will not be forced to liquidate.

Lin Baicheng only knows that the price of gold will rise to more than 800 US dollars in the next year and the beginning of the next year, and it is not clear how much it will rise or fall in the middle, so it is impossible to buy a lot of gold prices now.If he had known the rise and fall during the period, not only would Lin Baicheng not have bought such a high cost price, but he would have made a lot of short selling and made a fortune. It's a pity that he didn't remember it so clearly.

Unlike Lin Baicheng’s supplementary margin, Lin Baicheng, who has contact with Iwasaki Mineryu, knows that Iwasaki Mineryu finally couldn’t bear it after the gold price fell below 200 US dollars per ounce for the second time, and bought the next one above 240 US dollars. The long futures that I bought were flattened, because of the use of five times leverage, the loss was as high as 9000 million U.S. dollars.

Today, the long futures that Iwasaki Minelong bought above $200 is also a loss, but Iwasaki Minelong still holds it and does not touch it.

Before the liquidation, Iwasaki Mineryu asked Lin Baicheng for advice. Lin Baicheng only said that he would hold the long order, but Iwasaki Mineryu finally chose to close the long order and cut the meat to stop the loss.

Iwasaki Mineryu said at the beginning that he believed in Lin Baicheng very much, but when the investment loss reached a certain level, no matter how beautiful his words were, he would still make the choice he thought was correct, and no longer believed in Lin Baicheng's judgment so much.

However, these have nothing to do with Lin Baicheng. After Iwasaki Mineryu made his decision, he did not persuade Iwasaki Mineryu. He would not do anything thankless.

(End of this chapter)