nucmednet Chapter 7: Hong Kong Island Stock Exchange
Chapter 7: Hong Kong Island Stock Exchange
Only one day has passed.
Li Jiagang's company account suddenly had an extra HK$10 million, which was transferred to him by Li Yongsen.
Upon receiving the money, Li Jiagang immediately went to the Hong Kong Island Stock Exchange.
According to his recollection of the Wharf Holdings incident, Li Ka-shing began quietly laying the groundwork at the end of 77, gradually accumulating Wharf Holdings shares in the market through multiple brokerage firms and multiple accounts.
Until early September 1978, Wharf Holdings' share price surged from around HK$15 to HK$35. This rapid increase caught the attention of some, and soon after, a small newspaper reported that Li Ka-shing had secretly acquired Wharf Holdings shares.
For a time, Wharf Holdings' share price soared to over HK$50, but this was only a short-term surge. With Jardine Matheson's intervention, the incident was quickly quelled, and Wharf Holdings' share price fell back to around HK$30.
At that time, Li Ka-shing already held 1500 million shares of Wharf Holdings, representing an 18% stake.
What followed was a private deal between Bao Shengwang and Li Ka-shing, in which Bao Shengwang acquired all of Wharf Holdings' shares from Li Ka-shing. After Bao Shengwang entered the picture, he engaged in a year-long struggle with Jardine Matheson for control of Wharf Holdings.
Both sides exercised restraint during this period, preventing a surge in Wharf Holdings' share price. It wasn't until the decisive moment at the end of 79 that Wharf Holdings' share price skyrocketed from over HK$40 per share to a peak of HK$105 per share.
And now it's already the end of August.
There were only ten or eight days left since the news broke that Li Ka-shing had acquired Wharf Holdings shares, so he had to get on board as soon as possible.
Although this incident involving Li Ka-shing caused Wharf Holdings will not lead to Wharf Holdings' share price exceeding HK$100 per share, as it did when Pao Yue-kong confronted Jardine Matheson later.
But at its peak, it could break HK$50 per share.
If he can catch this train and handles it properly, doubling the price is entirely possible.
If he successfully invests all ten million Hong Kong dollars, even if the price doubles, he will earn tens of millions, which is enough for him to do many things.
Most importantly, the events triggered by this phase of Wharf Holdings will not last long. After Li Ka-shing was discovered to have secretly acquired Wharf Holdings shares, Jardine Matheson immediately took countermeasures. Subsequently, HSBC tycoon Sir Michael Sandberg intervened, and the shipping magnate Paul Chau took over, which suppressed the share price.
The whole thing will happen and end in September.
An investment that takes less than a month can yield huge profits; such a money-making opportunity is rare, occurring only once every ten years. You'll definitely regret missing out on Lijiagang.
10:00 AM.
Hong Kong Island Stock Exchange.
Upon entering the trading hall, there was no crowding; it was a bustling scene, much like a marketplace.
The scene was quiet. There were quite a few stock investors present, but everyone was focused on studying the stock market trends and did not disturb each other.
He recalled browsing reports about the Hong Kong stock market frenzy in the early 70s, when investors were scrambling to buy stocks, and the stock exchange was packed with people every day; it was a truly frenzied state.
Perhaps it was the devastating impact of the stock market crash of 73, followed by the global oil crisis of 74, that made Hong Kong stock market investors calm down and stop investing blindly.
Li Jiagang didn't dwell on these matters any longer and instead observed the situation at the exchange.
This is an exchange primarily listing British companies, and it is also the earliest existing exchange in Hong Kong.
Before the 1970s.
This exchange is incredibly powerful.
They demanded that all information on the exchange be displayed in English, and even refused entry to investors who did not understand English, practically putting up signs at the entrance prohibiting Chinese people from entering.
At the same time, the requirements for Chinese companies to go public are raised infinitely, and various excuses are used to prevent them.
This also meant that before the 70s, ordinary Chinese-owned companies rarely received approval to list on stock exchanges.
It wasn't until 69, when Li Zhaofu, together with several other prominent Chinese figures in Hong Kong, established the Far East Stock Exchange, that the problem of listing difficulties for Hong Kong's Chinese businesses was resolved, and Chinese businesses began to gradually rise to prominence.
By the mid-70s, there were four stock exchanges in the small city of Hong Kong: the Hong Kong Stock Exchange, the Far East Stock Exchange, the Kowloon Stock Exchange, and the Gold and Silver Exchange.
Starting in the early 70s, the Hong Kong Island Stock Exchange may have felt the pressure from the Far East Association and began to gradually relax the exchange's conditions.
The requirements for Chinese companies to go public have begun to be lowered.
Exchanges have also started using Chinese subtitles.
English proficiency is no longer required for investors to participate in the stock market.
With competition from all four financial institutions simultaneously, Hong Kong's financial industry experienced rapid growth and rapid expansion. In just a few years, Hong Kong's financial sector became second only to Japan in the entire Asian financial industry.
This shows just how powerful tiny Hong Kong is.
Li Jiagang looked around the trading hall, filled with curiosity about the exchanges of this era.
Without comprehensive indicators compiled by computers, he found it hard to understand how they managed to keep the indices changing and updating normally.
He knew that in this era, everything in the stock exchange was operated manually, but the index was a value derived from a combination of various functions in the stock market. If it were calculated manually, how many people would need to participate in the calculation at the same time to keep the index constantly changing, calculated, updated, and displayed?
Anyway, he really admires people of this era.
The thought of the staff using digital computers and abacuses to calculate the comprehensive values reminded Li Jiagang of the difficulties he faced when he first joined the research lab in his original world.
Everything has to be done by manpower.
Those who haven't experienced it can't understand the hardships and bitterness.
Without thinking much, he looked at the price list.
In the 70s, the total market capitalization and stock prices of all listed companies on the stock exchange were constantly updated manually using a blackboard.
At a glance, he saw that the top of the price list was full of British-owned listed companies, such as HSBC, Jardine Matheson, Swire, Hutchison Whampoa, Wheelock and Hongkong Land, among others.
He quickly found the Wharf Holdings quotation section. After all, Wharf Holdings is a subsidiary of Jardine Matheson, so its ranking on the exchange is not low.
Wharf Holdings has issued a total of 8300 million shares, with the latest price at HK$18.66 per share.
Seeing that Wharf Holdings is currently trading at only HK$18.66 per share, Li Jiagang was even more excited.
He thought that Wharf Holdings' share price would be at least HK$20 at this point, but it turned out to be less than HK$20.
So, his investment this time is probably much higher than his initial budget.
Li Jiagang was just about to learn about opening an account.
Just then, a voice came from behind him: "Hello, sir, I've noticed you've been observing here for a long time. Is this your first time getting involved in the stock market?"
Li Jiagang turned around and saw a man dressed in a suit and tie, who was also wearing a stock exchange employee badge.
Are you a stock exchange trader?
"Yes, sir, my name is Wang Fusheng. I am an employee of Dazhihui Investment Company and also a broker listed on the stock exchange. May I ask how I should address you, sir?"
My surname is Li.
"Hello Mr. Li, if you are interested in investing in the stock market, let's find a place to sit down and chat."
"Alright, lead the way."
"Mr. Li, this way please."
Li Jiagang went with his agent.
He was worried about how to open an account and deposit funds, and having the help of an exchange broker would be the best thing, saving him the trouble of consulting everywhere.
We arrived at a public rest area.
"Mr. Li, please have a seat. I'll go to my office to get some materials to introduce to you."
"Okay." Li Jiagang nodded.
After sitting down, he looked around again. There were many agents serving their clients at the scene.
Although the stock market in 78 was not as crazy as it was in the early 70s, there were still quite a few people investing in stocks, after all, Hong Kong's financial sector was still very strong at that time.
A moment later, the agent came over with a stack of documents: "Mr. Li, I'm sorry to have kept you waiting."
"This is a collection of recent stock market trends that I have personally compiled, including the latest information on the stocks of various listed companies and information on various products."
"Mr. Li, have you decided on a product to invest in? You can tell me about it and I'll introduce it to you."
The agent was very professional and presented him with the relevant information.
Li Jiagang did not refuse and picked it up to read.
He also wanted to learn more about the stock market in this era. Although he knew that Li Ka-shing would secretly buy Wharf Holdings shares at this time, he still wanted to be on the safe side and not jump in headfirst.
After reviewing it, I found the broker's data on recent stock market trends to be quite satisfactory, as it comprehensively recorded the daily trends and fluctuations of the overall market.
They even did predictive analysis.
Li Jiagang slowly put down the documents and said, "Mr. Wang, to be honest, I've looked into the stock market before but never invested. Now I have some spare cash, so I'd like to give it a try. Do you have any recommendations?"
Li Jiagang did not want his agent to know that he was after Wharf Holdings shares.
Otherwise, it's easy to attract the attention of agents, who are all shrewd and often have many clients they're working with at the same time.
Just because someone becomes your agent doesn't mean they will keep quiet or serve you wholeheartedly.
If it is discovered that Wharf Holdings' value far exceeds its market value, then it is very likely that someone will buy Wharf Holdings shares for other clients for profit, or even spread the news, and things will become uncontrollable.
He didn't want the share price to rise before he had fully invested in Wharf Holdings.