Chapter 38: A Thousand-Point Plunge

"Over a thousand one hundred points! The Hong Kong stock index fell more than one thousand one hundred points in a single day, marking the worst drop since the index's inception!" 

In a private room at the Victoria Hotel, Sun Wei was shouting excitedly as if on stimulants. Next to him, Wang Yunlong looked displeased with his friend and said, "Sun Wei, can you control your emotions a bit? Mr. Zhou is still here with us!"

Sun Wei looked somewhat embarrassed and apologized to Zhou Ming, "I'm sorry, Mr. Zhou. Please forgive my outburst."

Zhou Ming waved dismissively, indicating it was fine. Today marked the first trading day after the Hong Kong stock market resumed trading following its suspension. Everything went as Zhou Ming had anticipated: Zhang Zhaofu's statement at the press conference did nothing to instill confidence in the market. Instead, the four-day suspension had intensified market panic. When the market opened today, the stock index plummeted six hundred fifty points within just fifteen minutes. Despite assurances from Zhang Zhaofu and the Hong Kong government that substantial funds would be injected into the market to stabilize it, they failed to prevent the stock market collapse. By the end of the trading day, the index had fallen more than one thousand one hundred points, a staggering thirty-five percent drop.

This drop not only marked the largest single-day decline in the history of the Hong Kong stock index but also set a global record for single-day declines. Over sixty billion Hong Kong dollars evaporated from the market in just one day.

According to Zhou Ming's Hong Kong stock index futures contracts, he had earned twenty million Hong Kong dollars today alone.

While this amount might not be significant to some financial magnates, it was considerable given Zhou Ming's initial capital of five hundred twenty thousand. If Zhou Ming had started with a fund company, his capital would have been twenty million. In that case, the sixty billion Hong Kong dollars evaporated in this market crash might have flowed directly into his pocket. This meant that the development of Hong Kong over the past few years had essentially been working for him.

Thinking about this, Sun Wei trembled with excitement and admired Zhou Ming, saying, "Mr. Zhou, you're my idol! Your prediction about the global stock market crash is truly breathtaking. Even the most insightful individuals or the most sophisticated analytical computers in the world couldn't match your foresight!"

Lin Muqing sarcastically retorted, "Then why didn't you let us place orders earlier?"

"That was the most foolish thing I've ever done!" Sun Wei replied. "Back then, I failed to recognize Mr. Zhou's abilities and acted against him. I deeply regret it! If I had listened to Mr. Zhou's advice and placed the sell orders, I could have profited along with him!"

"Enough with the nonsense," Zhou Ming interjected. He turned to Wang Yunlong and asked, "What are your thoughts on the future of the Hong Kong stock market?"

Wang Yunlong gave a wry smile and said, "Mr. Zhou, don't make things difficult for me. The current Hong Kong stock market situation is completely chaotic. While I anticipated that the four-day suspension would intensify market panic, I didn't expect the market to drop so severely on the first day of reopening. Everything seems out of control, and I don't even know where to start analyzing."

Wang Yunlong summarized, "Mr. Zhou, your analysis was spot on. The economy of Hong Kong appeared strong, but it's actually just a bubble. The current stock market crash is just the concentrated explosion of that bubble."

"So do you think the market will continue to fall?" Zhou Ming asked.

Wang Yunlong nodded in agreement. However, Zhou Ming had a different opinion, "I believe the market has already reached its bottom."

Wang Yunlong and Sun Wei looked at Zhou Ming in disbelief, as if they had heard that the Chinese team had won the World Cup. They couldn't understand why Zhou Ming would make such a judgment, but given his accurate predictions about the Hong Kong stock market crash, they were reluctant to question him.

"As Hong Kong residents, you should have some confidence in Hong Kong's economy," Zhou Ming said. "The index falling one thousand one hundred points in a single day is clearly a result of the accumulated panic from the four-day suspension. As the saying goes, 'things reach their extreme and then reverse,' and Hong Kong, as an Oriental financial center, still has a certain economic foundation. It won't collapse as dramatically as it did twenty years ago."

"So Mr. Zhou, are you suggesting that the Hong Kong stock market will rebound after hitting the bottom?" Wang Yunlong asked uncertainly.

Zhou Ming shook his head, "The market fell one thousand one hundred points today, and the panic is still present. There are no conditions for a rebound yet. I predict that the Hong Kong stock market will continue to decline over the next week to half a month, but the drop won't be too severe. It will return to a level that accurately reflects the current economic situation in Hong Kong."

"Mr. Zhou, are you planning to withdraw your funds from the futures market?" Wang Yunlong asked.

"Yes, I will settle my stock index futures contracts at the futures company tomorrow," Zhou Ming replied.

He then glanced at Sun Wei, who immediately promised to handle the matter for Zhou Ming. Zhou Ming asked Wang Yunlong, "How are things progressing with the fund companies you were supposed to investigate?"

"Mr. Zhou, following your instructions, I investigated thirty fund companies in Hong Kong. After screening, I found that five of them particularly meet your requirements. Due to the impact of the stock market crash, their financial conditions are quite poor, and they are eager to sell," Wang Yunlong said as he handed Zhou Ming a stack of documents. "Mr. Zhou, these are the materials for the five companies. Please review them."

Zhou Ming took the documents and handed them to Lin Muqing. "I understand. I'll review these materials and let you know."

Wang Yunlong nodded in agreement.

---

The next day, Zhou Ming and Lin Muqing accompanied Sun Wei to Fenghui Futures Company. Sun Wei led the way and told Zhou Ming, "Mr. Zhou, I apologize. Because of the substantial amount of financial assets in your account, according to our company's regulations, it will be automatically submitted to my superior, who will handle the settlement for you."

Zhou Ming nodded in understanding. The financial market of this era was not as convenient as it would be in the future, and the stock index futures trading in Hong Kong had only been introduced for less than a year, still in a trial phase with many imperfections. Therefore, additional procedures were not surprising.

Sun Wei took Zhou Ming and Lin Muqing to his superior's office. Beforehand, Sun Wei had briefed Zhou Ming about his superior, who was named Wei and served as the Marketing Director at Fenghui Futures Company.

"Director Wei, this is my client, Mr. Zhou. He is here today to settle his Hong Kong stock index futures transactions," Sun Wei said.

"Settlement? Have you lost your mind, Sun Wei?" Director Wei looked up angrily at Sun Wei. "I didn't want to criticize you in front of the client, but you've really angered me. There are plenty of clients requesting settlements these days, but with the stock index plummeting so severely, clients have basically lost all their money. How can they even complete settlements? And you brought them here—what were you thinking?"

Sun Wei shrank under Director Wei's reprimand but stood firm, saying, "Director Wei, I know many clients are suffering heavy losses and cannot settle their accounts, but Mr. Zhou can. He placed a sell order for the stock index futures."

Director Wei was taken aback, "What? Mr. Zhou placed a sell order for the stock index futures ten days ago? How much did he place?"

"Not much, just fifty-two contracts," Zhou Ming answered.

Though fifty-two contracts might not seem like a large number, in the current market, where the stock index was plummeting daily, with sixty-four billion Hong Kong dollars evaporating in just one day, this amount could easily translate to a profit of ten million. Moreover, Zhou Ming's order was placed ten days ago, just before the stock market crash began. Even after accounting for the four-day market suspension and weekends, the profit could easily amount to twenty million.

Director Wei gasped, "Fifty-two contracts? Are you some kind of prophet?"

Zhou Ming smiled casually, "Can I proceed with the settlement now?"

Director Wei eagerly nodded, "Of course. Fenghui Futures Company will always provide Mr. Zhou with the best service."

Director Wei then called the finance department to begin settling Zhou Ming's sell orders. Soon, the results came through, and Director Wei handed Zhou Ming the documents. "Mr. Zhou, due to the market crash, the Hong Kong government and Stock Exchange have implemented some market controls, so not all of your sell orders could be settled. We settled the maximum amount according to your request. You can now receive twenty million Hong Kong dollars. Do you want to proceed with the delivery now?"

Zhou Ming nodded, "Yes, settle everything now and transfer the funds to my account at Fenghui Bank."

Director Wei thought for a moment and suggested, "Mr. Zhou, given the current market conditions, since your sell orders are already placed, why not continue with them? I believe the stock index will continue to decline for the foreseeable future."

"I know the Hong Kong stock index will continue to fall, but not by much. I want to settle the entire amount today and transfer it to my account at Fenghui Bank," Zhou Ming said.

Seeing Zhou Ming's firm stance, Director Wei sighed, "Mr. Zhou is indeed a decisive

 and visionary individual. Your ability to profit so much from the stock index futures market is not a coincidence. I hope you will continue to choose our company in the future. Our entire company will be dedicated to serving you."