Started from Hong Kong Island

Chapter 444 [Stock Market Crash in 442]

End of May 87
Li Wendi began to arrange for his companies to reduce their shareholdings, striving to cash out at the peak of the stock market in order to cope with the subsequent global stock market crash.

At the same time, he ordered his subsidiaries to start clearing bank loans and reducing the debt ratio to the lowest level. Even in extremely bad situations, the company would be able to operate with a small amount of funds.

Inside the office of Hengxin Investment Company
Li Wendi remembers that after the "August 145th Stock Market Crash", the US dollar plummeted, and the USD/JPY ratio fell from 120 points to around points at the end of the year. This was a good investment.

In the global economic crisis, it is already very good to have a profitable project.

In this situation, it is difficult for Wall Street tycoons to push up prices against the market trend, because the economic inflation of the US dollar is rising and the depreciation of the US dollar is a major trend.

However, Li Wendi will not invest a large amount of money because he has other projects that require a lot of money.

So he planned to take out 20 billion Hong Kong dollars for fun.

Lin Dongmei listened to Li Wendi's arrangement and asked in confusion, "The USD/JPY exchange rate has reached 145 points. There is probably not much room for appreciation. I am afraid that we won't make much money by investing 20 billion yuan."

Li Wendi laughed and said, "It's just for fun. Our mission in this stock market crash is to buy at the bottom and privatize some of our subsidiaries. This requires a lot of money, at least 400 billion yuan."

Lin Dongmei was shocked by the number. It seemed that her man was going to make a big move, so she began to think about which companies Li Wendi wanted to privatize.

"Is it Wharf Holdings and Cheung Kong Holdings?" Lin Dongmei asked. If so, perhaps she could get some shares.

Li Wendi smiled and shook his head. "I got one right, it's Wharf Holdings and Wheelock Holdings."

"Hutchison Whampoa? Isn't it a subsidiary of the Cheung Kong Group? I'm afraid it has little to do with our family." Lin Dongmei asked.

“Do you like Lane Crawford under Wheelock?”

"Do you want to privatize Lane Crawford?" Lin Dongmei widened her eyes. In Hong Kong, Lane Crawford is the leader in the high-end department store industry, and no company can challenge Lane Crawford's position.

If the Li Wendi family can privatize this company, it will add a lot of glory to the family.

Li Wendi nodded and said, "I'll give you this room. After Li Xi graduates from university, he can directly become the president of Lane Crawford."

Lin Dongmei was a little shocked by Li Wendi's big move, "This is inappropriate. Li Xi is so young, even if he can become the president, he can't control such a big company."

“No one is born with the ability to control a company. It is all acquired through training. However, Li Xi needs to intern at Lane Crawford during her college years, undergo the most basic rotations, and become familiar with the company’s business.” Li Wendi would certainly not let her daughter take a high position all at once. Such a castle in the air could easily lead to a crisis.

"Well, good. This will be of great benefit to Li Xi." Lin Dongmei immediately became happy. She was already very clear that Li Wendi was really giving Lane Crawford to Li Xi.

"The current market value of Wharf Holdings is 210 billion yuan, and the share price is 210 yuan," Li Wendi said. "We hold 49.4% of Wharf Holdings' shares. Hengxin Investment Company will help me reduce my stake in Wharf Holdings by about 15%, or 1500 million shares."

Lin Dongmei nodded and said, "Selling 1500 million shares can bring back 31 billion yuan. How do we announce this to the public?"

"Don't worry about causing any sensation. Just say that this is a normal reduction in holdings. Our family needs this money to invest in electronic products in Hong Kong." Li Wendi had already thought of a countermeasure.

Lin Dongmei agreed with this reason and continued to ask, "How low do you think the share price of Wharf Holdings can fall? How much money do we need to successfully privatize Wharf Holdings?"

Li Wendi thought for a while and said, "It should be able to drop by 3%, 147 yuan per share, plus a 2% premium, it will probably cost 120 billion yuan. If it is more, it may cost 150 billion yuan."

"The most crucial thing is the shareholdings of the Pao Yue-kong family and the Cheng Yu-tung family. They are the directors with the largest shareholdings on the board," said Lin Dongmei.

Li Wendi smiled and said, "These two families are the easiest to negotiate with, but it requires some exchange of our interests. I plan to sell some of our family's commercial buildings in Sheung Wan to Pao Yue-kong and Cheng Yu-tung. They will sell them to me for the sake of face."

"All the commercial buildings in Sheung Wan?" Lin Dongmei asked reluctantly. It seemed that she was also a miser.

"Of course it's all, the estimated floor area is 300 million square feet." Li Wendi said without any concern. In Li Wendi's plan, the market value of Harbour City in Tsim Sha Tsui and Times Square in Causeway Bay under Wharf Holdings has exceeded billion yuan. It is a bargain to exchange such a high-quality company for only a few billion yuan.

As long as his family continues to hold these properties, the Li Wendi family will have a place in Hong Kong and even in the world.

Seeing that Li Wendi had made the decision, Lin Dongmei had no choice but to nod.

In fact, Lin Dongmei knew that the properties in the core areas such as Central, Tsim Sha Tsui and Causeway Bay had little to do with her house, so she wanted to ask for the less central properties such as Sheung Wan.
Monday, December 1987, 10
Wall Street was shrouded in dark clouds. With the rapid and dull "ding ding ding" of bells, the New York Stock Exchange began a new day.

When the market opened, an ominous premonition spread unconsciously, and the Dow Jones Industrial Average fell 67 points in an instant when it opened.

Upon seeing this, investors began to sell their stocks, and a red plate appeared on the screen.

Panic began to spread, gradually turning into chaos.

From 9:11 to a.m., the Dow Jones Industrial Average continued to fall as if there was no end in sight.

At 10 o'clock in the morning of Hong Kong time, Hong Kong had already begun. The Hang Seng Index was affected by the New York stock market and fell 120 points in panic. By the time the market closed at 12 noon, it had fallen 235 points.

Changxin Group Office

Li Wendi saw the news on TV for the first time. The group’s senior executives also gathered in the office, and no one wanted to go for lunch.

"Boss, it's just as you expected. The global economic crisis has come. Fortunately, we took the lead in making preparations, otherwise the group would have suffered heavy losses." Zhang Wentao spoke first.

Li Wendi shook his head and said, "We are not the only ones who have made sufficient preparations. Large companies such as Cheung Kong Holdings, Kai Tak Properties, New World Development, etc. have also anticipated the crisis. It may be that they did not predict the timing as accurately as we did."

"Is it time to release some information about the privatization of Wheelock Group?" Gao Yi asked.

Li Wendi shook his head and said, "Let's wait a little longer. The market has just started to fall. We have plenty of time. After privatizing Wheelock, Wheelock will also privatize its subsidiaries, Po Fook Development, Federal Development, United Enterprises and Harriman Development, leaving only Wheelock Shipping and Real Estate Investment Trust as listed companies."

"What about Lane Crawford Development Company?" Wang Tichuan reminded.

"Lane Crawford Development Company will be acquired by my family company and then privatized." Li Wendi said directly. Everyone present was his confidant, and he also had to seek some benefits for his family.

Wang Tichuan and others nodded, not daring to say anything against it.

Li Wendi looked at the Rolex on his wrist and found that it was already half past twelve, so he said to his subordinates with concern, "Let's go eat. You don't have to come to my place in the afternoon."

"Yes!" Everyone answered in unison, and then left the office in an orderly manner.

Before leaving get off work, Zhang Wentao and Bai Hui came to Li Wendi's office together.

Bai Hui said, "Boss, the Hong Kong Stock Exchange has sent back a message that it has decided to suspend the stock market and futures market for four days from October 10 to October 20. This will be enough time to clear a large number of unfinished settlements."

Li Wendi sneered, "Li Fuzhao is going to be in trouble. Does he think that suspending the market can stop the Hang Seng Index from falling? It will only cause more serious panic and bring trouble to himself."

"I wonder how big of an impact this global stock market crash will have on local cities?" Zhang Wentao sighed with some worry. Fortunately, his boss asked him to sell off the properties under his name, otherwise he didn't know how much he would have lost.

"This is none of our business. The group has 100 billion yuan in cash in its account, and its debt has been reduced to 20 billion yuan. As long as we are optimistic about Hong Kong's prospects, these short-term stock market crashes will have a limited impact on us." Li Wendi began to assign some tasks to Zhang Wentao. "Wentao, what you need to do now is to collect information on high-quality properties in Hong Kong, whether it is a shopping mall, an industrial building, or a commercial building in Central. You need detailed information, and it needs to be updated every three days."

"Do we need land as well?" Zhang Wentao asked.

"Of course." Li Wendi nodded. "Manager Bai should keep an eye on the stock markets in Hong Kong, the United States, and Singapore. Once the decline slows down and the price is right, you can buy in immediately."

(End of this chapter)