Chapter 668 Super Typhoon
Chapter 668 Super Typhoon
Yang Wendong nodded and said, "Yes, Mr. He, you also understand economics very well. Do you think the current economic situation in Hong Kong is normal?"
"It's not normal. The Hang Seng Index has risen too much in recent times." Ho Sin Hang paused and said, "This is influenced by the acquisition of Dairy Farm by Hong Kong Holdings and the acquisition of HK Electric by Hutchison Whampoa. But more importantly, because the mainland has good relations with the West, too much international capital has entered the Hong Kong market, leading to explosive growth in the stock market."
Yang Wendong smiled and said, “The analysis is correct. Today, the stock market and the local market have far exceeded normal values. Hong Kong citizens cannot afford such high prices, especially housing prices;
The stock market bubble is also very large. Many companies only need to buy a piece of land, and before they develop it, the stock price will soar. The speed of making money is faster than developing real estate. "
The profits from real estate are very high. If you use leverage and are a little bolder, the money you can earn from a project may be 5 times or even times the initial capital.
However, due to legal restrictions, no matter how high the multiple is, you have to wait for a while before you can get the profit. This is also the protection set up by the Hong Kong government in the early years to avoid real estate risks. The house must be built soon before it can be pre-sold. This also limits the high leverage of real estate companies and protects the interests of ordinary home buyers.
There is no time problem in the stock market. As long as the story is told well and investors believe that their company will make a lot of money in half a year or a year, the stock price can double today. Thanks to the madness of the stock market today, the stock market increase may even exceed the project profit.
This is a huge temptation for capital that likes speculation, so the bubble naturally gets bigger and bigger. Nowadays, the stock market bubble is much larger than the real estate bubble. From 68 to 72, housing prices only increased three or four times, while the Hang Seng Index increased more than ten times or even nearly twenty times.
Ho Sin Hang thought for a moment and said, "Hong Kong society really cannot afford such a bubble, whether it is real estate or the stock market; but our current situation is completely different from before, and a large amount of international capital is the fundamental reason for the expansion of the bubble;
When these international investors withdraw, the stock and land prices will collapse, but no one knows this, or does Mr. Yang have some inside information?"
Many times in the past, the economy has reached a crisis stage, all due to internal reasons of Hong Kong itself. Even if there was foreign investment in the past, it was attracted by Hong Kong relying on its own capabilities.
But the massive amount of foreign investment in Hong Kong today is due to the mainland, and this capital comes from all over the world. It is estimated that even they don’t know how many peers there are, and it is unlikely that they will act in a unified manner;
But Yang Wendong is very special after all, so perhaps he has some information channels.
Yang Wendong shook his head and smiled, "No, that's not the case. This is my speculation, and it's my personal judgment. I think the risk is a bit too high now. A few months ago, I arranged for Changxing Real Estate to shrink appropriately.
Mr. Ho, if you were a real estate company, I wouldn't tell you this specifically, but Hang Seng is a bank. Once a large amount of your real estate business has bad debts, if it is taken advantage of by British banks like in 65, there will be consequences. You don't need me to remind you, right?"
Although there is no substantial evidence, the biggest manipulators behind the run on Hang Seng Bank in 65 and the run on several Chinese banks should be HSBC, the Hong Kong government and British capital groups; it’s just that Hang Seng was forcibly rescued by Yang Wendong, but some other small banks were not so lucky.
Now seven years have passed, but no one can guarantee whether HSBC will still have ideas about Hang Seng. After all, Hang Seng's influence in Hong Kong is second only to HSBC. Maybe in another ten years, it will be hard to say who is stronger and who is weaker. This is also the reason why HSBC planned to take over Hang Seng in history, to nip its competitors in the bud.
"Bank run?" He Shanheng also thought of this immediately. His face changed slightly. After thinking for a while, he asked, "How confident are you, Mr. Yang?"
"It's hard for me to say, but I think there is a certain possibility." Yang Wendong naturally would not make any promises, he was just giving a reminder.
He Shanheng thought for a moment and said, "The real estate market is very hot right now. If we sell a lot of our businesses at this time, it will inevitably result in a certain loss."
"It shouldn't be a loss. At most we'll just make less profit." Yang Wendong said with a smile.
For capitalists, making less money may mean losing money.
Ho Sin Hang smiled and said, “Yes, it’s just that Hang Seng will be listed next month. If we sell a large number of real estate businesses at this time, it will only make the market pessimistic, which will in turn affect financing;
Mr. Yang also knows how important this IPO financing is. Even if there are problems in the real estate market in the future, raising enough funds will help Hang Seng to survive the crisis.”
"Well, this is indeed a difficult decision." Yang Wendong said, "Or you can hold on for another month and wait until the listing. During this month, you can contact other banks to see if they are willing to take over some high-risk but high-profit real estate mortgage business. After the listing financing, you can trade immediately and get back some of the funds."
If the banking business wants to be sold, it can only be sold to other banks. Just like real estate, if you cash out before the real estate price drops, there will naturally be someone who will take over.
But this is also a free market, everything is free to buy and sell, no one is cheated;
He Shanheng nodded and said, "Okay, this is indeed a method. I will consider it."
"Well, no matter what, Hang Seng needs to be prepared, at least the cash reserves must be sufficient." Yang Wendong reminded again;
In fact, if a bank run really happens, no amount of cash will be enough, but if there is enough cash, enough to show to depositors, then depositors may give up the run and thus survive the crisis;
Many banks in Hong Kong lent out large amounts of money for the sake of profits, regardless of risks. The Hong Kong government itself did not take care of the situation, and unlike other places, there was no government credit guarantee. Therefore, once problems arose, all banks collapsed.
This is also why in history, Chinese capital rose and succeeded in all walks of life except banks. This is because banks are too special. If they want to succeed, they need strong support behind them, either a super conglomerate or the government.
After He Shanheng left, Fang Xianming, who had been silent, said, "Mr. Yang, it seems that He Shanheng is not willing to give up the real estate business."
"I've already reminded him. It's up to him whether to do it or not." Yang Wendong smiled and said, "But he is a smart man. Even if he won't do it forcefully, he should have made some preparations appropriately. It will be fine as long as no big problems arise." As for the companies that he invests in, he generally doesn't interfere too much. For example, he won't inform several real estate companies at all and let them deal with it on their own.
Time soon came to mid-August, and a super typhoon blew in from the South China Sea and hit the whole of Hong Kong.
This super typhoon is called Rita. It is one of the strongest typhoons in the 20th century. It was born in the Pacific Ocean in early August with extremely high wind speeds. It hit the northern Philippines at the beginning of the month, causing a large number of floods and wind disasters in the area, causing huge damage;
On the 13th, it arrived near Hong Kong and also caused huge damage. You should know that in June, Hong Kong had just experienced the 6 rain disaster. Less than two months later, another disaster struck. A large number of low-lying buildings were flooded and thousands of people lost their homes.
After the typhoon, Yang Wendong immediately convened a company-wide meeting, and senior executives from all subsidiaries were present.
Yang Wendong asked: "How much impact has this typhoon had on our company and business?"
As Changxing Group owns a large number of properties in Hong Kong, it is natural that it would not be without losses when encountering such a super typhoon. Moreover, there is no typhoon insurance to buy in this era, so the group can only bear this kind of disaster by itself.
Wei Zetao said: "Among the warehouses under Changxing Industrial, one of the older ones has closed down, and three others have serious water leaks. Many building windows have been shattered, and the rain has caused a lot of damage to goods. The exact amount of damage still needs to be calculated."
Zhou Haoran from Watsons said: "There are also many damaged windows here, and the rain has also caused damage, but there are no collapsed buildings. This may be because my factories are all newly built and have better resistance to typhoons."
Wang Zhiqun also said: "It's similar here. The loss is not big, but there is a power outage because of the rain. At present, we dare not supply electricity at will. We can only resume production after a thorough investigation."
When Changxing Industrial rose to prominence, it was the early stages of the development of the entire group. Without external support, the only way to expand was to purchase a large number of old properties, which are naturally even older now. When other subsidiaries grew, this was not the case, and they often bought land and built houses on their own.
Yang Wendong nodded and said, "Okay, give it to me after you have the statistics. After the disaster is over, we will conduct a comprehensive inspection of the company's properties. If they are too old, we will directly demolish and rebuild them, or build them in another place.
Although these losses are not huge, the losses caused by shutdowns are incalculable and will disrupt the company's original production plans. We should try to avoid this kind of thing."
In fact, unless the factory building is customized for a special industry, it is not worth much money, but many materials and production lines inside, whether they have problems or stop working, will have a great impact;
This is a taboo in manufacturing companies. Traditional industries may be better, but in special industries such as automobiles, chips, glass and steel production lines, the loss caused by one day of shutdown will be much higher than a day's turnover.
"Okay." Several people agreed.
Zheng Zhijie said: "Mr. Yang, some of my old properties were also blown down, and I am also planning to rebuild them all later."
"Okay, you are just a shop here, so just rebuild it on the original site. You don't need to consider other things." Yang Wendong nodded and said, "How many employees of all companies were injured? Have you counted them?"
"No, because we knew about the typhoon in advance, so many factories stopped working." Wei Zetao said: "However, some employees' homes were blown down or flooded by the wind. The number is quite large and we are still counting it."
"Well, then we should give these employees some convenience, such as holiday arrangements, or some consolation money, and help them find temporary accommodation." Yang Wendong said, "We also need to give employees a certain sense of belonging."
Although these things are more abstract, they are often very useful. When an employee has a problem, the company helps, which is also very motivating for other employees.
It’s not just natural disasters like this. In fact, if an employee of Changxing Group is seriously ill or their family is in extreme difficulty, they will also help. In addition, notices will be issued to encourage everyone to donate.
This way, more funds can be raised to help those in need. Secondly, it is also a way to inform employees of this matter. Thirdly, it allows some employees who are not very poor to do something to help others. It can be said that it achieves three goals with one stone.
"Understood." Wei Zetao and others agreed.
Yang Wendong said: "Okay, that's it, the group will donate some money later."
PS: Please give me a monthly ticket
(End of this chapter)