Reborn as a Noble's Son

Chapter 456: Chapter 428: The Battle Begins_1
Short selling the Hang Seng Index?!

When they heard this news, the originally bustling banquet hall quieted down instantaneously. Following this, these elites in the room couldn’t help themselves.

In small groups, they quietly began to discuss: “Short selling the Hang Seng Index? Isn’t that just fueling the fire?”

“Mr. Zheng is right. The objective of these international hedge funds is to short sell the Hang Seng Index, forcing the Hong Kong government to step in and protect the market from crashing. Given the government’s financial capabilities, they would naturally be unable to combat these international capital predators. This is why the Mainland government has sent representatives here. Surprisingly, this representative from the Mainland government seems to be quite useless. Before he starts to stabilize the market, he is already ruining his own prospects. Shorting the Hang Seng Index first is just adding insult to injury. As things stand, the Hang Seng Index definitely won’t hold, and a complete crash is imminent. I’m afraid many people will be jumping off buildings soon.”

All these comments, without exception, were heard clearly by Li Chao. Several notable figures from Hong Kong, including Mr. Bao, Li Estate and others, as well as Mr. Shao, who controlled the media in Donggang, all walked up to him.

Mr. Bao, a former seaman, still possessed the frank and bold spirit of a sailor. Although he had now amassed a fortune, his temperament hadn’t changed much. Managing to withhold his temper, he softly said to Li, “Brother Li, this young man… does he even know how to handle finances? Even a layman like me knows that short selling the Hang Seng Index will only add fuel to the fire.”

Seeing the puzzled expressions of the others, Li Chao found himself in a difficult position. He stepped forward and softly asked Nie Zhenbang, “My dear nephew, what is going on? Short selling the Hang Seng Index? Isn’t that just shooting ourselves in the foot?”

Nie Zhenbang scanned the room, studying the owners of Donggang’s fortunes. The only one present who was engaged in the financial industry was the chairman of the Donggang Securities, a man who didn’t have a traditional background in finance. It seemed like the announcement had been a bit abrupt. He smiled and said, “Uncle Shi, I think today’s banquet cannot continue. It’s still early, so why don’t we move to a conference room? I’ll give everyone a detailed explanation.”

With such a matter, the fewer people who know, the better. Announcing the decision to short sell the Hang Seng Index in public was already extremely bold. Who knows if there are people with ulterior motives here? If word were to leak out, it would be a disaster. Naturally, this deep secret couldn’t be divulged under such circumstances. If the opponents learned about it, they would lose all advantages.

Seeing this situation, Nie Zhenbang had no choice but to temporarily change his plans. Without a clear explanation now, these people might not sleep well when they get home. If, out of fear, someone did something drastic, the losses could be quite severe. The measure of these losses would be in the tens of billions.

At this time, Li Chao naturally did not have any objections. After quickly consulting with the people next to him, he nodded in agreement.

Here, the management team of the Bank of Huaxia, especially Han Qi, who is the appointed contact person, was outstanding. Within ten minutes, a small conference room was set up.

The term ‘small’, in this case, was relative to those conference rooms that can accommodate hundreds of people. In fact, the room was not small, accommodating over sixty people. It was spread out in an oval configuration.

As the group entered the conference room and sat down, Nie Zhenbang brought out a laptop. After connecting it to the multimedia projector, an ups and downs chart of the Hang Seng Index appeared on the screen.

Nie Zhenbang then said: “Respected elders, you are the pillars supporting Donggang’s economic stability and social prosperity. Pleasantries aside, we can now confirm that international hedge funds are targeting Donggang.”

After a pause, he continued, “What is certain is that Donggang’s HK dollar has a very robust monetary system, unlike the fragile Thai baht or Indonesian rupiah. Hence, I deduce that the international hedge funds’ attack on Donggang will not start with foreign exchange as before. Considering that Donggang is one of the world’s top three financial centers and is renowned for its great economic freedom, I think the most probable attack strategy of international hedge funds is to short sell the Hang Seng Index massively, forcing Donggang securities to suspend trading or crash. Financial properties have a knock-on effect; once securities are breached, they will forcefully short sell the HK dollar and release the HK currency they hold to depress the HK dollar. Thereby putting constant pressure until Donggang’s economy completely collapses.”

Upon hearing Nie Zhenbang’s words, everyone gasped. Initially, they all thought the attack would start with the HK dollar; they hadn’t expected securities to be the target.

One of them questioned with his hand raised, “Mr. Nie, may I ask, how can you be so sure that these people will attack the Hang Seng Index? Also, does this have anything to do with your heavy shorting of the Hang Seng Index?”

Nie Zhenbang was quite pleased. This person’s unconscious cooperation saved him the trouble of taking the initiative to speak out. This question-and-answer format made his point more convincing.

He nodded and said, “Good question. First of all, looking at the Hang Seng Index, I have conducted detailed research on its economic data over the past ten years. Today, the Hang Seng Index is exactly 8712, and it has risen by more than five percent this week. Everyone in Donggang is cheering, but I feel that this is just a harbinger of an impending storm. If I am not mistaken, the speculators have already started to quietly set up their positions, gradually shorting the Hang Seng Index.”

All of these things happened in his past life. From the closing index of July 17th, in less than a month’s time, the Hang Seng Index fell from 8712 to a record low of 6544. This was a period of darkness and doom for the people of Donggang.

After the stock index, international speculators attacked the futures market and then the foreign exchange market, heavily selling the Hong Kong dollar. This led to the famous ‘Battle of Hong Kong’.

The reason why I heavily shorted the Hang Seng Index is because I want to take the other side by surprise in the following week. During this period, we will divert some of our funds to support Donggang’s local blue-chip stocks and some major index shares. This is why I hope you all can cooperate with me. Because, before the international speculators withdraw from short selling, my plan is to pull out. After that, we will turn the ship around and drastically raise the Hang Seng Index, leveraging the government’s credibility and utilizing the massive funds we’ve earned to deal the heaviest blow to these speculators.”

The words of Nie Zhenbang left the bosses standing there, mouths agape. It was only at this moment that they truly believed in Nie Zhenbang.

During the weekend, Nie Zhenbang wasn’t demanding. The team members could take the opportunity to visit Donggang, go shopping, visit Ocean Park, or even experience Donggang horse racing at the Happy Valley Racecourse.

Early Monday morning, before the opening of the market, everyone had already gathered in the auditorium. Nie Zhenbang stood at the back, watching the Hang Seng Index candlestick chart on the big screen, which had no time-sharing trend.

He pondered for a moment then issued the first order, “After market opening, the operating team will continue to increase short positions. Remember, don’t startle the snake in the grass. I’m afraid Soros and others are also shorting the Hang Seng Index now. Our joining in will certainly speed up the decline of the Hang Seng Index. Han Qi, on your end, get in touch with the local tycoons like Li Chao and tell them to cooperate with the funds we’re allocating to them. Absorb shares and maintain a slow decline, don’t fall too fast.”

Nie Zhenbang’s strategy was clear. In the financial market, information is highly transparent. It’s clear who’s shorting and who’s absorbing shares. Since they were shorting, they absolutely couldn’t absorb shares at the same time. Allocating funds to Li Chao and others would lull their opponents into complacency and create the illusion that the company was protecting its own shares.

On Nie Zhenbang’s side, the shorts could only make the likes of Soros think that this was another company hoping to get its share of the pie. After five straight days of short selling, a large number of short positions had accumulated in Nie Zhenbang’s hands. Although Li Chao and others were also protecting the market, not only with state funds but also their own, the Hang Seng Index had fallen by 4.3% by the end of the week, closing at 8257.

At this moment, Nie Zhenbang was deep in thought. If the trend followed history, the index would fall to around the 8000 level in the following week, and then drop by 11% in one week. The index would go as low as 7000. That would be the fiercest moment of the battle and when the speculators would close out their positions.

At the same time, inside a skyscraper in Donggang, Soros and a group of international financial speculators had set up their temporary office. A room filled with dozens of computers served as their headquarters.

A white man handed Soros a document, saying, “Sir, according to our investigation, this mysterious company shorting the market is using an account from a small brokerage firm called ‘Dagang Securities’. Moreover, it is said that the Chinese government has now stepped in. A significant amount of Li Chao and others’ funds is supported by China.”

Hearing this, Soros was less worried. The Chinese Government was overestimating their abilities. With the combined funds they could mobilize exceeding 7 trillion US dollars, the power of international speculators wasn’t something they could imagine.

Soros paused for a moment and then ordered in a deep voice, “Call those greedy guys. Next week will be the last week to place orders. After that, we will start enjoying the joy of harvest.” (