Chapter 10: Surge in Capital

520,000 HKD!

And this is the money he can actually access!

Apart from the 120,000 HKD principal, Xia Yu made a profit of 400,000 HKD!

It must be said that Bluewater Commercial's stock price was pushed down significantly. Without the manipulation by major players, it would have been impossible for Xia Yu to earn this much, as evidenced by the price declines of other companies in the same industry. Bluewater Commercial was simply too weak and had become a target for the manipulators!

Of course, even though Xia Yu earned 400,000 HKD, this doesn't mean it's all in his account. He actually has a bit more than 520,000 HKD in his account, but the pure profit he can withdraw is not that much.

After all, HSBC Investment Department is not a charity. They helped Xia Yu with leveraged funding at a ratio of 5:1, providing financial support!

Since it's not for free, they naturally have to charge a commission!

Besides the commission charged by HSBC Investment Department, Kowloon Stock Exchange also takes a share.

The total transaction cost for Hong Kong stocks adds up to about 3.6%, including a 2.5% commission, a 1% stock stamp duty, a 0.02% investor compensation levy, a 0.05% Securities and Futures Commission trading fee, a 0.05% Kowloon Stock Exchange fee, and a 0.02% settlement company settlement fee.

Anyone trading stocks on the exchange must pay these fees; no one can escape them!

Thus, operating a stock exchange is also a business. Stock exchanges are akin to companies, which is why Hong Kong has four exchanges.

The threshold for setting up an exchange is relatively low, and it's a guaranteed profit with various conveniences. Additionally, stock exchanges can facilitate personal and interest exchanges. Given these benefits, it's no wonder everyone wants a share.

That's why the Hong Kong government does not allow a fifth or sixth stock exchange.

Later, the Hong Kong government realized that having multiple stock exchanges was detrimental to the Hong Kong stock market, which led to the consolidation of the four exchanges into one.

Without further ado, Xia Yu had no time to worry about these predetermined matters. He had already applied to withdraw all the funds after settlement. Even though the HSBC Investment Department staff suggested he delay the settlement, Xia Yu ignored them.

Although Bluewater Commercial's stock price still had room to fall, Xia Yu was no longer interested in the small profit. He had more important things to do.

After all, the market would be closed for two days, and if he didn't withdraw the funds, they would be idle, wasting Xia Yu's time.

It had already been over ten days, and his time was tight. For him, time was far more valuable than that small profit!

Seeing Xia Yu's determination to withdraw the funds, HSBC Investment Department staff reluctantly agreed but did not offend him. After all, they had witnessed Xia Yu's skills. Although they suspected luck played a part or that he had insider information, it didn't matter. They just knew that HSBC also had a share of the benefits.

So, Xia Yu successfully submitted his settlement application and would apply for withdrawal once the settlement was completed the next day.

However, just because Xia Yu wanted to withdraw the funds didn't mean he could do it immediately. He would have to wait until the day after tomorrow to transfer all the funds to his bank account.

This highlights the difference between the Hong Kong stock market and the A-shares market from his past life.

Hong Kong stocks, like US stocks, can be traded on a T+0 basis, meaning you can buy and sell on the same day, as many times as you want. However, after trading, you have to wait until the second business day after the transaction to withdraw the money, which is T+2 settlement. T refers to the transaction day.

Before T+2, clients cannot withdraw cash, physical stocks, or transfer the shares for purchase.

In contrast, the A-shares market in mainland China used to implement T+0 trading rules in 1992 for the Shanghai Stock Exchange and in 1993 for the Shenzhen Stock Exchange. However, due to the market frenzy and risk control, the system was changed back to T+1 settlement in 1995, meaning you could only sell on the following day after buying, unlike Hong Kong stocks which allowed same-day transactions. The T+1 system remained until 2017.

Mature stock markets usually adopt T+0 trading, indicating that the A-shares market was not very mature and was heavily regulated.

Moreover, unlike Hong Kong stocks, A-shares have daily price limits; a stock cannot rise or fall more than 10% in a day.

These trading rules are disadvantageous for retail investors, making them highly susceptible to market fluctuations without a buffer, and they can only watch helplessly as their investments plummet.

However, for capable individuals like Xia Yu, this presents a big opportunity. Although market fluctuations are more extreme and riskier, they also offer higher profits.

For those in the financial industry, risk is normal, and taking risks for higher profits is entirely worth it.

The world is never short of gamblers! Such lenient systems, similar to those in Europe and America, are a crucial reason Hong Kong became a financial center.

After finishing his work, Xia Yu returned home and began to plan for the next day.

He reviewed the manuscript of "The Search for the Qin Dynasty" and smiled, murmuring, "It's almost here. I need to find a target and acquire a newspaper quickly tomorrow!"

Indeed, Xia Yu was planning to start a newspaper!

Although making money in the stock market seems faster—turning 120,000 HKD into 520,000 HKD in one day—this is not the norm. It was just a stroke of luck and an exceptional situation.

Normally, turning 120,000 HKD into 520,000 HKD would take a long time, even for Xia Yu, at least ten to fifteen days.

Moreover, making money in the stock market can wait; Xia Yu urgently needs to publish his novel to start his own career and persuade his parents to approve of his dropping out of school.

If Xia Yu only had the funds, the source would be questionable. Even if he earned over a million HKD in the stock market, his parents might panic and try to seize it since he is only 16!

Therefore, Xia Yu planned to start a newspaper, publish his novel, and use a more acceptable approach to convince his parents.

Since he wanted to start a newspaper, Xia Yu had already considered his plan.

For Xia Yu, establishing a new newspaper is time-consuming and requires connections, which he lacks. He doesn't have the time to start a newspaper quickly!

What to do if you lack time? Don't worry; as long as there's money, most things in the world can be accomplished. Acquiring a company is within the realm of what money can achieve.

For Xia Yu, acquiring a small newspaper with 520,000 HKD is more than enough!

Acquisitions and mergers are crucial for a company's leap in growth. Take Cisco Systems, which once became the world's top company. Its history is a merger story.

Cisco earned the nickname "Mergers and Acquisitions Engine"!

Under the leadership of acquisition enthusiast John Chambers, Cisco acquired over 90 companies in just ten years, rising to the top of the world in just over a decade! This is the charm of acquisitions!

Of course, all of this relies on one thing: money!

Xia Yu is confident that his abilities are not inferior to those of acquisition experts like John Chambers. With enough money, he can achieve similar feats and take a company to the top. This confidence comes from his knowledge of industry leaders.

Unfortunately, his total assets amount to only 520,000 HKD, making it too early to start acquiring other companies.

So, for now, he needs to be pragmatic and not aim for the stars immediately!

"But it's okay. Everything starts with acquiring the first newspaper!" Xia Yu murmured, his eyes shining with determination.

The contract had just arrived in Shanghai, and it would probably take a few more days to finalize. It's a torment. Finally, he asked his friends for recommendations again, deeply grateful!