Chapter 524 The Future Far East Exchange

Chapter 524 The Future Far East Exchange

Chapter 524 The Future Far East Exchange
In the blink of an eye, it is already December, and the first year of Hong Kong’s economic recovery is coming to an end;

After arranging plans for several manufacturing industries, Yang Wendong also turned his attention to the two most profitable industries in Hong Kong: real estate and finance.

Zheng Zhijie, who was in charge of the real estate business, and Fang Xianming, who was in charge of the financial business, also came to Yang Wendong's office. The three of them drank tea together and talked about something.

"This year, real estate prices in Hong Kong have increased by 26%, which is not a lot. However, the Hang Seng Index has increased by 65%, which is a really high ratio," said Yang Wendong after looking at some basic data.

The Hang Seng Index was originally launched by Hang Seng Bank in 1964, and was not officially announced to the public until 1969.

Now that Yang Wendong has become the largest shareholder of Hang Seng, after knowing this, he discussed with Ho Sin Hang and announced it directly. In this way, the two words "Hang Seng" represent the Hong Kong stock index, which is an advertisement for the bank also called Hang Seng.

The Hang Seng Index was 1964 points in 100, then fell to around 67 in 50, and only gradually rose this year.

Zheng Zhijie explained: “Mr. Yang, in fact, this year’s real estate cannot be viewed as an average, because many people suffered heavy losses during last year’s economic crisis, so even though the economy has begun to recover this year, there are still relatively few people buying houses;

However, the prices of many luxury homes and prime locations in Hong Kong have increased by more than 40%. Many of our company's properties are such high-quality assets."

"Well, that's okay. As long as society has confidence, the overall price will go up soon." Yang Wendong smiled and asked, "How much area of ​​properties have we acquired this year?"

In 1968, when the economy was just beginning to take off, land hoarding naturally would not stop.

Zheng Zhijie replied: "Mr. Yang, this year I have purchased a total of about 160 million square feet of land and properties. Among them, 4 plots of land came from the Hong Kong government's auction, 2 plots of land were used to build commercial office buildings, which I will own in the future, and 2 plots of land were used to build residential buildings, which will be sold to cash out and return funds;

Others have also acquired some land from many British companies, which are also being carried out according to the plan, with some sold and some held by the company;

Also”

Yang Wendong listened while drinking tea. After he finished, he said, "That is to say, this year Changxing Real Estate can obtain a net profit of about 2000 million Hong Kong dollars, plus about 70 square feet of self-owned properties?"

"Yes, but some of the land here was acquired last year, so not all of it is this year's profit," Zheng Zhijie added.

Yang Wendong smiled and said, "It doesn't matter. Just let the finance department arrange the most appropriate calculation based on the tax. With so many properties last year, it may not be possible to develop them all in the next 10 years."

There have been many economic crises in Hong Kong’s commercial history, but the decline in land prices in the next 73 and 83 years was far less than that in 1967;

Therefore, Changxing Real Estate also tried its best to acquire a large number of properties last year. However, it is impossible to develop all these properties at once. Changxing Real Estate does not have the funds and the society cannot accept so many properties at once. That would only lead to the collapse of the real estate market.

Moreover, there are many properties among them that are just a bit old and can still make profits, so they will naturally be kept first. Only some vacant land needs to be developed first.

"Okay." Zheng Zhijie said, "Mr. Yang, the old naval site we acquired in 65 has already started laying the foundation. In addition, there are three buildings with more than 3 floors under construction on Hong Kong Island.
Together with the buildings we already have, once these are completed, we will have 20 properties with more than 10 floors on Hong Kong Island.”

Changxing Real Estate actually has about 20 buildings, but many of them are less than 20 stories high, which is not good enough for the table.

The buildings above 20 floors include Changxing Building, Four Seasons Hotel and a few buildings acquired from Swire Properties.

"10 buildings, it's still far behind Hong Kong Land." Yang Wendong shook his head and said, "Hong Kong Land has more than a dozen buildings in prime locations in Central, and there are also many outside."

Zheng Zhijie said: "It will take some time for Hong Kong Land to surpass them after a century of accumulation."

"Or, if we can acquire it, it will be more convenient." Yang Wendong smiled, then looked at Fang Xianming and said, "Old Fang, how is your acquisition of Jardine Matheson Holdings' shares going?"

Fang Xianming replied: "Mr. Yang, I currently hold 5.1% of Hong Kong shares, 4.7% of Jardine Matheson Holdings, and 8.9% of Wharf Holdings."

"The proportion of Kowloon Wharf is so high?" Yang Wendong was delighted;

His target was Hong Kong Land, but Hong Kong Land was the pillar of the Jardine Matheson Group and the symbol of the Hong Kong government. It would probably not be easy for him to acquire Hong Kong Land.

Then why not start with Wharf Holdings. Relatively speaking, Wharf Holdings is much smaller in scale, but it is also of particularly high quality, especially the land of Harbour City, which is larger in area and more valuable than that of Whampoa Group.

Fang Xianming said: "Yes, this year Wharf Holdings had a public share increase financing in order to develop its real estate, and I seized the opportunity to expand our shares.

If I had not gone all out to avoid being discovered, I would have probably already acquired about 10% by now." "This year, many British companies are indeed preparing to enter the real estate market on a large scale." Yang Wendong nodded and said, "But this is also an opportunity for us."

Except for Yang Wendong, the rise of Chinese capital all depends on real estate, and even Yang Wendong has a part of his industry relying on real estate;
In this case, the rise of Chinese capital will inevitably stimulate some British capital, and they will naturally want to come in and get a piece of the pie;

It’s just that they don’t understand real estate operations. After the first wave of attempts, they lost all their money and were forced to adopt a low-risk model. So they either expanded their shares to raise funds like Wharf Holdings and Wheelock, or sold some land like HK Electric and Swire, and used the funds to operate other land.

This practice benefited Chinese capital. The Zhang family took advantage of this opportunity to become a major shareholder of Wheelock, and Zheng Yutong took advantage of this opportunity to acquire Swire's Blue Chimney Pier and built it into a top-notch commercial center and hotel in the future.

Many wealthy Chinese also benefited from the cooperation with HK Electric and Swire. As for Wharf Holdings, it diluted too many shares in the early stage and was eventually targeted by Li Ka-shing and Pao Yue-kong. Ultimately, Jardine Matheson lost Wharf Holdings.

Fang Xianming said: "Yes, these British capitals have established special real estate companies to develop their own land, but their ability is not very good. In fact, I don’t quite understand it. Even if the real estate business can’t make a big profit, it won’t lose money. But these British capitals can actually make a loss."

Yang Wendong smiled and said, “Don’t worry about them. You two should remember that if there is a large piece of land for sale by British capital and the location is suitable, you should take the initiative to buy it;
As for some British companies that own a lot of land, such as Hong Kong Electric and Wharf Holdings, if they want to dilute their shares and increase their capital, I will also secretly acquire them.”

"Yes, Mr. Yang." Fang and Zheng agreed.

Yang Wendong looked at the information in his hand again and said, "As for business, just continue with the previous model. Is there anything else?"

Fang Xianming replied: "Mr. Yang, I have something to say. The stock market is booming now, and British capital has made a lot of money from it, but the Hong Kong Stock Exchange is now preventing Chinese capital from listing under various pretexts;

Therefore, many Chinese investors are negotiating to build a new exchange specifically for Chinese capital.”

"A new exchange?" Yang Wendong guessed which one it was, and asked, "Who is behind this?"

Fang Xianming said: "It is a man named Li Fuzhao, a MBA student who returned from the United States. We call him Professor Li because he has worked in the stock exchanges of the United Kingdom and the United States. He is very experienced in this field and has some fame.

So many Chinese investors have recommended him to take charge of this matter, and I have also met him and talked with him, and he does have some insights.”

"Then what does Professor Li want us to do? Also participate in promoting the establishment of a new exchange?" Yang Wendong asked.

Fang Xianming said: “Yes, they hope that we can stand on their side and promote the establishment of an exchange belonging to the Chinese;

The second is that we hope that after the Chinese exchange is established, several companies under our Changxing Group will be able to go public.”

Yang Wendong chuckled and said, "It's not a problem to help promote the establishment of the exchange. I can help, but my companies will not be listed for the time being."

The Far East Exchange was originally established at the end of 1969, which was one year away. So for such a big event, planning should have started more than a year in advance.
It is a good thing for Yang Wendong that Chinese companies can be listed, so that many companies he invested in before can be listed and cashed out. Of course, he does not need to cash out, but will continue to increase the acquisition of some Chinese companies. Otherwise, if no one goes public, he will have to negotiate for shares one by one, which is very annoying.

Once there are more listed companies, it will be much simpler for us to directly acquire some high-quality assets based on our past memories and market performance. This is also a way to indirectly obtain dividends from the real estate industry.

But many of his own industries rely on the prophet's golden finger, so how can he go public? Unless one day he has to go public due to strategic needs.

Fang Xianming agreed: "Okay, I'll tell him right away."

Yang Wendong thought for a moment and said, “Well, let’s notify the Oriental Daily and expose this matter. There are still many stock investors in Hong Kong who read newspapers. Let them know that it is difficult for many Chinese-funded listed companies to be listed on the Hong Kong Stock Exchange.

As long as more people know about it, then either the Hong Kong Stock Exchange will agree to allow Chinese companies to go public, or a new exchange will have to be established. In any case, we won’t lose out.”

In fact, according to normal logic, it is definitely not possible to turn away customers, but the Hong Kong government often goes against the market and insists on targeting Chinese capital, so Chinese capital can only find new ways;
In the past, after the establishment of the Far East Exchange, many Chinese companies went public and achieved very good results. Then, a bunch of Chinese companies rushed to go public. The Hong Kong Stock Exchange immediately became anxious and opened its own listing channel, but no one was interested.

Later, it gradually declined until the 80s when the Hong Kong government merged all exchanges, and Li Fook-shuo became the first person in charge.

Fang Xianming smiled and said, "Okay, I'll go tell Qin Sheng."

Yang Wendong added: "Also, let them set up a special topic to write information for the stock market. Many people will pay attention to this aspect in the future."

In the 60s, only large companies were listed, and many people did not believe in stocks, so there was not much enthusiasm;
But starting from the 70s, things were completely different. Many people paid attention to stocks, and this became a major news focus.

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(End of this chapter)