This small country, spanning only 700 square kilometers, is composed of more than 60 small islands. It can be said to be a place with no natural resources at all. The arable land it possesses is not enough to sustain its local population, and most of the living necessities are imported from neighboring Southeast Asian countries. Even fresh water needs to be purchased from neighboring Malaysia.
Despite such resource scarcity, Singapore's economy began to soar in the 1970s and made significant investments in infrastructure in the 1980s, accelerating the development of high-value industries, making it one of the world's most important exporters of electronic products. In the 1990s, it was collectively known as one of the "Four Asian Tigers" along with Hong Kong, Taiwan, and South Korea.
In addition to traditional industries, Singapore is also a significant financial center, transportation hub, and international trade transshipment station in Southeast Asia. Located at the Strait of Malacca, Singapore tightly controls the throat of Asian maritime trade, becoming a crucial transshipment station for maritime trade among countries.
For a long time, in the Asia-Pacific region, apart from the undisputed financial center of Tokyo, another international financial center has been fiercely competing between Hong Kong and Singapore. Benefiting from port trade, Singapore has a very developed futures market, including coffee, rubber, crude oil, and fuel futures and spot markets. The futures markets for the Nikkei Index, Taiwan Index, and others are also highly developed, along with transactions in currency interest rates, Eurodollars, and Euroyen.
The Hong Kong market has fewer corresponding varieties, but due to the backing of the world's largest market, it leads Singapore in terms of scale and growth.
In summary, both sides have their strengths and weaknesses, each excelling in different areas.
To maintain its economic position, Singapore has long restricted the development of competing regions, especially the port of Haihe and Hong Kong. In the later years, to limit the development of the Haihe port, the Singapore government used government relations to delay the port development plan for several decades.
Returning to the present day in the late 1980s, a Mercedes-Benz minivan was driving on the road to the Singapore Exchange. In the back seat sat a middle-aged Asian man with a stern expression, around 40 years old, wearing a neatly pressed suit and shiny leather shoes, clearly a successful person.
He is Iwamoto Kaoru, the representative of the Kanto Financial Group in Singapore. A graduate of the University of Tokyo, he experienced the economic boom in Japan. After joining one of the top-ranked banks in Tokyo, he rose to the position of branch manager in just five years. Later, he was noticed by higher-ups and was directly dispatched to Singapore in 1986 to take full responsibility for the futures business after the Singapore Exchange launched the Nikkei 225 Index Futures.
Upon arriving in Singapore, Iwamoto was greatly impressed by the country's orderly and clean environment, which even surprised the highly disciplined Japanese. The Singapore government's efforts in public environment management are evident. Singapore is known internationally as a garden city, and even though it imports fresh water, the streets are cleaned daily.
With the heavy responsibility from the bank, Iwamoto has not disappointed since coming to Singapore. Using ample funds, he has dominated the Nikkei Index market on the Singapore Exchange. Over the past three years, he has earned several hundred million dollars annually in the futures market, earning the trust of the group's senior management. The funds entrusted to him have steadily increased, reaching up to one billion dollars by 1989.
Before the appearance of the mysterious funds, Iwamoto Kaoru's funds were one of the most important forces in the market. Almost everyone was closely watching the movements of this Japanese man, hoping to catch a glimpse of his actions. However, his positions and strategies were strictly confidential.
In fact, Iwamoto Kaoru's trading strategy is quite simple. Due to his large capital, after making some hedging, he placed all his bets on the bullish side. This is not only because he is from Japan but also because he is backed by the Japanese financial group, giving him a deeper understanding of the Japanese market compared to other participants in the Nikkei futures in Singapore.
However, Iwamoto Kaoru, who was immersed in the dream of the Japanese stock market's bull run, suddenly discovered that a significant amount of funds had been quietly accumulating short positions. Initially, the positions were small, but by October, the volume suddenly increased, with daily investments reaching several million dollars.
Suddenly awakened, Iwamoto Kaoru and his team carefully searched through the chaotic trading records to track the movements of this fund. They found that this fund had quietly established a short position of several hundred million dollars.
This was a blatant provocation, and it could not be tolerated. The day after discovering this shocking phenomenon, Iwamoto Kaoru raised the price of the Nikkei futures in the market, aiming to deal a heavy blow to the other side. He believed that with his current capital, he could exert enough pressure on the market.
When a large number of buy orders appeared in the market, the entire market was in turmoil. The brokers on the floor frantically called their clients to inform them of what was happening. Most traders guessed that a Japanese financial group had made a move, and more experienced traders identified it as Iwamoto Kaoru's action based on the trading style.
The small institutions and retail investors with smaller capital immediately became active, following the large capital, pushing the Nikkei futures price up by two percentage points. More buy orders continued to flood in.
Iwamoto Kaoru, who wanted to force the mysterious fund to show its hand, was not disappointed. As the Nikkei index rose sharply, the short side, after a brief silence, resolutely took on most of the long positions, bringing the Nikkei index back to its original track.
It was only when the short side suddenly exerted force that most market participants realized that a major short position had appeared in the Nikkei futures market, which had been dominated by the long side. The situation seemed to be on par with the long side.
Those with quick minds immediately saw an opportunity to make money, while those with a broader perspective began to wonder if a turning point in the Japanese market had arrived.
Regardless, the Nikkei 225 Index Futures market immediately attracted the attention of most participants.
At this point, the situation was not clear. The first encounter between the long and short sides was over, and most professional institutions and funds were holding back, waiting to see what would happen. Some invested small amounts of capital to try to profit from the situation.
After the first clash, both sides gathered many followers, quietly waiting for the next confrontation.
Iwamoto Kaoru did not disappoint them. After a brief rest, a long position worth over one billion dollars in Nikkei futures was placed. As soon as this long position appeared, the scattered funds that had been trying to profit from the short side quickly switched to the long side.
To everyone's surprise, the short side did not fall behind. It quickly absorbed the long positions and even provocatively placed some short positions, showing that its capital was not inferior to the long side.
The two probes made Iwamoto Kaoru understand the strength of the other side. He began to hold back, quietly lying in wait, as the futures still depended on the performance of the Japanese market.
The traders in the market were expecting a third round of confrontation, but to their disappointment, the long side suddenly went quiet, and the short side did not pursue the victory. It seemed that both sides had reached some kind of tacit agreement and disappeared from the Nikkei futures market.
The traders knew that both sides were lying in wait, gathering strength for the next battle.
As for the small retail investors, some who had bet correctly were already celebrating, while the losers were deeply regretful, thinking about how to liquidate their positions and wait for the next opportunity. After all, opportunities for significant fluctuations in the Nikkei futures were not common.
Ironically, the futures battle involving billions of dollars had little impact on the Japanese market, which was worth hundreds of billions of dollars. The bullish Japanese stock market continued to grow steadily. On that day, the Japanese stock market rose by several dozen points, and the Nikkei 225 Index closed above 35,500 points.
In Singapore, influenced by the growth of the Japanese market, even under the heavy pressure from the short side, the Nikkei 225 Index Futures continued to rise slowly. This gave the long side some hope, and the trading volume increased after the confrontation. The short side, which had been celebrating, began to regret not taking profits, while the long side, which had been stopped out, lamented not holding on a bit longer.
The capital market is a wondrous place where fortunes can be made or lost in an instant.
Speaking of which, Iwamoto Kaoru, who held a large number of long positions, did not lose much and even had a slight profit at the close of the market. However, he was not happy and immediately called Tokyo after the market closed.
As expected, Tokyo had no clue about the mysterious fund. However, after hearing Iwamoto Kaoru's report, several senior bank executives held an emergency meeting and unanimously decided to provide him with an additional one billion dollars.
Other Japanese financial groups with seats on the Singapore Exchange also received the news and, confident in the Japanese market, made similar moves.
For a time, funds from Japan flooded into Singapore.
Iwamoto Kaoru was not overly excited about the additional one billion dollars. In the previous confrontation, he had not fully gauged the other side's capital, which made him wary.
By analyzing the previous day's trading volume, Iwamoto Kaoru and his team found that the short positions held by the mysterious fund had not been liquidated much, indicating that a few million dollars in losses were insignificant to them.
"It's time to pay a visit to my fellow countrymen!" Iwamoto Kaoru, sitting in the minivan, recalled the events of the previous day and said to himself. (Thank you all for your strong support. The recommendation votes have exceeded 3,000 today, and as promised, I will add an extra chapter tomorrow, making it three chapters in total. I hope you enjoy it. Finally, a special thank you to reader huxingaa for the tip!)