Central is the area with the highest concentration of skyscrapers in Hong Kong. The Hong Kong government, the Court of Final Appeal, the Legislative Council Complex, and the Governor's House are all located here. Similarly, many major banks, multinational financial institutions, and foreign consulates are also established here, making it the political and commercial center of Hong Kong.
Zhong Shi stood on the top floor of the Far East Financial Center, looking through the golden glass curtain wall at the nearby HSBC headquarters and the under-construction China International Building, and couldn't help but sigh.
It truly is a different world. At this time, the China International Building with its three-pointed design had not yet been completed, and the cannon on the top floor of HSBC had not been installed. The Cheung Kong Center, which would be built between them, was not even a shadow. In fact, the Cheung Kong Center was not completed until 1999.
Familiar buildings like the Central Plaza, International Finance Centre, Taikoo Place, Hong Kong Police Headquarters, and the Government House in Admiralty, which are well-known in the future, have not yet appeared. The few skyscrapers Zhong Shi could recognize were HSBC, China International, and the Lippo Centre, which is under construction and known as the "Kangaroo."
Hong Kong already has the appearance of a world financial center, but it has not yet become one of the three major financial centers as it would in the future. The Hong Kong government relaxed banking license restrictions in 1977 and abolished the interest tax on foreign currency deposits in 1982, leading to a large influx of international banks and capital into Hong Kong. By the mid-1980s, Hong Kong had become a significant financial center in the Far East.
In fact, the only place in the Far East that could be called an international financial center at the time was Tokyo. Hong Kong had just slightly pulled ahead of Singapore.
Andrew, a futures broker specializing in the U.S. capital market, received instructions from his manager two days ago to host a major client today, reportedly worth tens of millions. Andrew took this meeting very seriously, preparing thoroughly, not only by wearing a custom-made suit but also by cramming a few Cantonese phrases.
"Welcome," as Liao Chengde and Zhong Shi appeared at the door of the futures company, Andrew eagerly pulled open the glass door and greeted them respectfully.
To Andrew's surprise, Zhong Shi walked in front of Liao Chengde, entering the futures company, which had a seat on the Chicago Mercantile Exchange. Liao Chengde, who followed behind, looked calm, seemingly unaware of the breach of protocol.
After everyone was seated, Andrew took out a thick stack of documents and explained in English, "Mr. Liao, we have studied the issues you previously consulted about. Here are the relevant materials. I can assure you that our company offers the lowest commission rates in Hong Kong."
What shocked him again was that the child, who looked about ten years old, took the documents without hesitation and began to read them. Liao Chengde, whom he thought was the main target of this meeting, widened his eyes and shook his head with a mocking expression, indicating that he did not understand English.
Andrew realized that the main character might be someone else, possibly this child!
"Initial margin of 6%, maintenance margin of 5%. Much better than I expected. I'll open an account with your company!"
Zhong Shi quickly scanned through the documents and nodded to Liao Chengde.
"Can we have a few minutes?"
Liao Chengde was taken aback and then said to Andrew. He spoke in English, as he had learned a few basic phrases after living in Hong Kong for many years.
Andrew shrugged, indicating understanding. After he left, he was convinced that the child was the key. He quickly thought about how to please the child to secure the deal.
"Zhong Shi, have you really thought this through?"
Seeing that the reception room was empty, Liao Chengde couldn't wait to ask. It's no wonder he was anxious; this time, Zhong Shi not only sold all the "Cheung Kong Holdings" stocks but also borrowed five million Hong Kong dollars from him, totaling ten million Hong Kong dollars. This was a significant amount relative to Liao Chengde's current wealth.
Since Zhong Shi had asked him to investigate futures, Liao Chengde had studied futures knowledge. Before he understood it, it was fine, but once he did, he was terrified. Futures were far riskier than stocks, by tens or even hundreds of times.
Liao Chengde did not want to lose the wealth he had worked hard to accumulate. He also wanted to see what Zhong Shi could do to survive in the highly risky futures market.
"Sure."
Zhong Shi chuckled, showing a dismissive expression. It was a joke to let such a once-in-a-century opportunity for major countries to jointly intervene in the foreign exchange market slip by; it would be like inviting disaster!
Of course, he couldn't tell Liao Chengde this. If Liao Chengde didn't follow him, it would be his loss. Zhong Shi could understand, but deep down, he looked down on him a bit.
Seeing that persuasion was ineffective, Liao Chengde didn't insist and picked up his water cup to drink.
"Gentlemen, have you made a decision?"
Andrew was very perceptive. Seeing that the two had stopped talking, he knew the conversation had ended. He waited two more minutes before knocking and entering.
"Everything is settled. Thank you for your trouble. Please buy all our money into the yen futures contract!"
Zhong Shi nodded and said expressionlessly.
In this era, computer networks were not as advanced as in the future, and transoceanic orders still relied on phone calls, which added many variables. This was why Zhong Shi had decided to place the order a week in advance.
"What? All ten million to buy yen futures?" Andrew was dumbfounded, as if he couldn't believe what he had heard. Full-position trading in the futures market was a major taboo because a slight change in direction could result in a margin call. If the margin was not met, the futures company or exchange had the right to force a liquidation until the account balance was sufficient to maintain the margin.
A margin call, the most extreme situation, meant that even after liquidating the last contract, the account balance was insufficient to cover the margin. In some cases, after paying the losses on the contract, the account holder might still owe money, meaning a total loss.
Foreign exchange futures generally involve the U.S. dollar as the other currency. For example, a yen futures contract means a futures contract where the yen is expected to rise against the dollar, meaning the yen appreciates and the dollar depreciates.
Andrew wanted to say more, but Liao Chengde cleared his throat and said, "We are macroeconomic researchers. Based on our research and predictions of the international economy..."
He spoke at length, making Andrew's forehead sweat profusely, even though the air conditioning was set to full. Liao Chengde spoke in Chinese, and Andrew didn't understand Chinese, which was a source of great anxiety for him. Finally, Zhong Shi saw his distress and explained in English, "Mr. Andrew, follow my instructions! Also, if there are any major announcements, please call me immediately!"
The phone number he gave was Liao Chengde's, and the account was also opened in Liao Chengde's name.
Hearing Zhong Shi's words, Liao Chengde couldn't help but roll his eyes.
"Yen futures, December delivery, full position, buy now! Clear?"
Before leaving, Zhong Shi sternly repeated the instructions to the still stunned Andrew.
The reason for buying the December contract was that it was already late September, and due to the approaching delivery deadline, most funds had shifted to the November and December markets. Futures are called futures because most delivery dates are in the future, and most contracts in the market are offset rather than delivered.
"Yen, long..." Andrew hurriedly repeated Zhong Shi's words and nodded repeatedly. Zhong Shi then relaxed, took a sip of coffee, and frowned, saying, "Black coffee without milk or sugar suits me. Can you change it for me?"
Delighted to keep the client, Andrew hurriedly went to change the coffee.
Waving to stop Liao Chengde, who wanted to say more, Zhong Shi walked to the floor-to-ceiling window and looked at the distant Central. This Central was different from the one he knew in the future, but it was still the most prosperous place in Hong Kong.
"Alas, the First Emperor of Qin and the Emperor Wu of Han, slightly lacking in literary talent, the Emperor Taizong of Tang and the Emperor Taizu of Song..."
Looking at the towering buildings and the bustling traffic below, Zhong Shi suddenly felt a surge of passion and recited the familiar poem.
"Liao, do you think I can buy HSBC?"
After reciting the poem, Zhong Shi pointed to the distant HSBC headquarters and said in a condescending tone, his expression cold and his voice calm, as if he were talking about a trivial matter.
"Crazy!"
Liao Chengde shouted in his heart. HSBC held a significant place in the hearts of Hong Kong people. Founded in Hong Kong, HSBC grew alongside the city, becoming a giant in the global financial industry. The locals always considered HSBC a local bank, and under British rule, HSBC was indeed a locally grown banking giant, with its registered office in Hong Kong until 1990!
In the 1980s, HSBC had already begun its internationalization strategy. As early as the 1970s, HSBC had acquired the American bank Marine Midland to expand into the North American market, and in 1981, it entered Canada. HSBC had gradually become a multinational bank with a presence in Hong Kong and operations around the world.
In Hong Kong, only China International could rival HSBC. This was not just a rivalry between two banks but also a representation of the two major countries behind them.
To say that Zhong Shi wanted to buy HSBC, a bank of such importance, was absurd to Liao Chengde!
This day was September 17, 1985. Soon, Liao Chengde's thoughts would be shaken!