Chapter 1009: A stock market crash is coming!

Facing the concerns of Bao Yugang and Huo Yingdong, Xia Yu smiled lightly and said, 'Don't worry, I can't raise your bank loan interest rates, can I?'

Bao Yugang's face twitched, and he said with some dissatisfaction, 'Yu, you've misunderstood me. The bank interest rate is whatever it should be. The loan interest rate you gave us was already the lowest in Hong Kong. This time, your deposit-taking costs have also risen. If you still give me the original loan for the next loan, and you lose money, where will my face be?'

'What I want to ask is to what extent and in what direction the property industry in Hong Kong may go as a result of the bank interest rate hike. If we act according to our previous plan for the property industry, what should we do this time?'

Xia Yu looked at Bao Yugang and Huo Yingdong, who were staring at him with burning eyes, and after a long pause, he said solemnly, 'Bao, Huo, with the land we have obtained so far, it is enough for development for a few years. I personally suggest that we should not continue to invest in land acquisition for the time being. We should continue to construct the projects that have already started, and then prepare the funds to buy at the bottom.'

Bottom fishing?

When Xia Yu said this, even Bao Yugang and Huo Yingdong, who had seen it all, were shocked.

The term 'bottom fishing' was not used lightly!

Huo Yingdong hurriedly asked, 'Yu, do you mean the stock market crash is coming again?'

Bao Yugang also asked with a grave face, 'Yu, could the stock market crash be triggered by this interest rate hike?'

No wonder they attach so much importance to it. After all, they have all experienced the 1973 stock market crash.

That crash caused many Chinese-owned companies to close down or go bankrupt. Many companies had broken capital chains and found it difficult to borrow money from banks.

Many more were unable to repay their loans because they had used their stocks as collateral. When the stock price fell to a certain level, they had to either offer more stocks or have their assets confiscated by the bank.

However, British companies were in a completely different situation during the stock market crash.

They could easily obtain loans from British-controlled banks such as HSBC, Standard Chartered Bank and Hang Seng Bank.

It was precisely because of the stock market crash that the four major British consortia aggressively acquired Chinese companies at low prices. Each consortium had at least 150 to 60 companies, and some had as many as 300 to 400 companies, and their strength grew rapidly.

The two of them were considered very lucky to have survived. However, without the help of some Chinese banks such as the Bank of China (Hong Kong) and Nanyang Commercial Bank, it is hard to say whether they would have been able to survive the stock market crash.

If there is another stock market crash, it will be too uncontrollable and risky. They must prepare as soon as possible, so as not to harm themselves and Xia Yu.

Moreover, if they prepare properly in advance, they may be able to take advantage of the situation and grow explosively, just like the four major British financial groups after the last stock market crash.

As for the stock market crash, Xia Yu had already decided to let the two know before he arrived, and he had even decided to invite these two staunch allies to participate together, so he nodded and said, 'Yes, the stock market crash is indeed coming.'

There were just some things he couldn't say, such as the fact that he wanted to promote the stock market crash. Fortunately, he had prepared equally convincing reasons.

'In fact, the interest rate hike by the Hong Kong Association of Banks is just a trigger. The stock market crash is coming, and the main reason is actually the combined impact of the global economic downturn and Hong Kong's economic recession.'

Bao Yugang frowned and asked, 'Yu, could you please explain a little more clearly?'

Xia Yu nodded with a smile and continued, 'I won't go into the reasons for the interest rate hike by the Hong Kong Association of Banks, as it was explained very clearly at the press conference.'

Bao Yugang and Huo Yingdong nodded in understanding, then continued to quietly watch Xia Yu and wait for him to continue.

'First, let's talk about the global economic downturn. Europe has not yet emerged from the economic quagmire, and the United States, the main force, has not yet emerged either. Not only that, but after the Federal Reserve announced an interest rate hike, capital flowed back to the United States, but the U.S. stock market continued to fluctuate downward, which caused investors' investment sentiment to weaken.'

'The United States is the capital pointer, and their own capital market is in the doldrums. The European stock market has also been affected, not to mention the Hong Kong stock market. After all, there are too many foreign financial institutions in Hong Kong, as evidenced by the outflow of funds from these institutions and the exchange rate spread.'

'And what about the Hong Kong economic downturn? Don't look at Hong Kong now, it seems to be booming, but we all know that many labour-intensive companies have already set up factories on the mainland, and production capacity is already being transferred. Although, at my suggestion, the Hong Kong government is building the Yuen Long Science and Technology Industrial Park, it will take time for results to appear.'

'In the time of the transfer of manufacturing, the contribution of the real estate industry to the economy has become more prominent. However, now that we are suppressing housing prices, the cost of land acquisition by other real estate companies has further increased due to bank interest rates, which is gradually reducing their ability to withstand risks. These are all obvious to investors.'

'The current capital market has reached an all-time high, but according to my modelling analysis, it is the precursor to a 'head and shoulders' trend. In charting terms, this is the shape of a major market crash.'

'This possible stock market crash is caused by a combination of internal and external problems, so there is almost nothing that can be done to prevent it. What can be done is to delay it, for example, by using capital to stimulate the stock market and artificially create a general trend. Under this general trend, the Hang Seng Index will continue to rise.'

Xia Yu paused for a moment, then looked at Bao Yugang and Huo Yingdong again, shrugged his shoulders helplessly, and said, 'But as you know, flooding can only be prevented, not cured. If this time we artificially delay it for a longer period of time, allowing the Hang Seng Index to rise higher, then the power of the subsequent outbreak will be even more violent!'

'The only way is to support the stock market until the world economy emerges from the doldrums, opening the ceiling for Hong Kong stocks. Then the Yuen Long Science and Technology Industrial Park should be completed as soon as possible to attract enough companies to build and put into production, strengthening the economic foundation of Hong Kong.'

Xia Yu's long speech was full of practical advice, and Bao Yugang and Huo Yingdong could easily tell.

But it was precisely because they agreed with Xia Yu's words that their mood was all the more complicated.

A stock market crash seemed inevitable!

After a long while, Bao Yugang frowned and said, 'Yu, the Song family and the Shi Yahuai family are currently locked in a fierce battle, which is also a factor boosting the HSI. The Song family is now in a precarious situation. If the Song family is finished off by the Shi Yahuai family, the stock market crash will be upon us.'

'If that's the case, doesn't that mean we only have a short period of just over ten days?'

To Bao Yugang's surprise, Xia Yu shook his head and said with a smile, 'Bao Yugang, how can you be so sure that the Song family will lose?'

Bao Yugang immediately said, 'The Song family is now at a disadvantage in terms of both capital and equity, so how can they...uh...'

'Ah Yu, you seem very sure that the Song family will win? Why?'

Xia Yu took a sip of tea and said with a light smile, 'Because the Song family asked me for help, and I will get involved.'

Bao Yugang's body trembled, and he looked at Xia Yu with burning eyes, asking, 'Ah Yu, didn't you just end things with the Taikoo consortium, and now you plan to take them on again?'

'Your decision absolutely took everyone by surprise!'

Xia Yu said with a faint smile, 'This time, I'm not taking the initiative to fight the Swire Group either, but when acquiring Cathay Pacific Airways, the Song family gave me crucial support. At that time, I promised Song Bo that if the Song family suffered retaliation and losses because of that matter, as long as the Song family asked, I would lend a helping hand.'

'So this time, when the Sze Ya Huai family retaliated against the Song family and Song Bo asked me for help, naturally I couldn't go back on my promise.'

'If you want to help the Song family acquire Taikoo Industrial Group and Taikoo Trading Group despite being at a disadvantage in terms of shareholding, you can only go to war with the Taikoo consortium.'

'Since you've already offended them to death, just fight.'

'Lao Bao, Lao Hu, what do you think? Do you have any ideas about fighting together?'

Xia Yu said the last sentence with a smile to the two of them.