Chapter 1042: Xia Yu's Knife Exchange

'Norman Shiyahuai was admitted to the hospital?'

Hearing the shocking news brought by Wang Qi, Xia Yu looked inexplicable. This news came as a surprise to him.

'I heard that the company's stock price plummeted, triggering the warning line for HSBC mortgage loans. Norman Shi Yahuai couldn't take the blow and fainted on the spot at Swire Finance. Many Swire Finance employees witnessed him being carried away on a stretcher. '

'The specific situation is still being further confirmed.'

'But I don't think the news is false.'

'Because of this negative news, the stock prices of companies such as Swire Pacific Group have fallen sharply.'

Wang Qi replied solemnly.

Xia Yu said with a light smile, 'Norman Shi Yahui fainted at the wrong time. He's stabbed himself in the back. Even if he wakes up and finds out the situation, I don't know if he can bear the blow and if he'll faint again...'

Wang Qi couldn't help but smile and said, 'It's hard to say. If he wakes up too late, the situation of the Swire Group will be even more serious. I'm afraid he can't bear a more severe blow.'

Xia Yu smiled and did not dwell on the matter of Norman Shih Ya-wei.

His expression became serious as he said to Wang Qi, 'I originally conservatively estimated that the Hang Seng Index would fall to around 650 points at the latest next week, but today we received two assists in the form of the bank's bankruptcy and Norman Shih Ya-wei's fainting, so it will definitely fall to 650 points this week, and the trough is likely to be even lower.'

'The Swire Group and the Carrian Group are both finished, so we need to get ready to buy low.'

Wang Qizhong nodded in agreement, 'Okay, I'll go over the preparations again to make sure we're covered.'

'Mmm!'

...

Norman Shi Yawei was the soul of the Swire Group, and his downfall was a devastating blow to the Swire Group.

Xia Yu also did not show mercy because Norman Shi Yawei had not woken up.

At his instruction, detailed information about the debts of the Swire Group and the Shih family was released in the afternoon, and the news that the Swire Group was insolvent spread widely in the city.

By the time the stock market closed that afternoon, Norman Shih-Yawei still hadn't woken up.

However, the market value of the Swire Group had already fallen to 2.86 billion Hong Kong dollars.

The market value of Swire Pacific closed at over 780 million Hong Kong dollars.

The market value of Swire Shipping closed at over 920 million Hong Kong dollars.

As for the Swire group, since Jiuding Securities had stopped buying up shares, Song Bo had also been told by Xia Yu not to interfere too much, so the market value had dropped to HK$1.34 billion.

Even though the market value of these companies had dropped to such a level, they were still considered a group with a relatively high price-earnings ratio in the entire stock market.

If you do the math, compared to the market value when the Hang Seng Index was over 1,800 points, the market value of the Swire group had only shrunk by about six times.

The market value of companies such as Swire Pacific had shrunk by less than half.

By the time the stock market closed on Wednesday afternoon, the Hang Seng Index had fallen to a low of 662 points, nearly two-thirds of its value when it was above 1,800 points.

If we compare it to the decline in the Hang Seng Index, the market value of the Swire group would have to fall to HK$2 billion to be roughly appropriate.

Not to mention that due to Norman Shiawai's series of lending operations, the Swire group's debt ratio is much higher than other Hong Kong companies, and a market value of HK$2 billion is still quite high for them.

Back to the topic at hand, that afternoon, there was another incident: another small bank declared bankruptcy, causing even more panic in the banking industry.

6:30 p.m.

Xia Yu and Li Qian arrived at the MacLehose residence on time and were warmly welcomed by MacLehose and his wife.

This was the second time Xia Yu had come to the MacLehose residence with Li Qian.

'Mr Xia, please have some tea.'

After a few polite exchanges, Xia Yu and Li Qian sat down on the sofa together, and the wife of MacLehose poured a cup of tea for Xia Yu.

'Thank you!'

...

A simple cup of tea and a chat passed in a flash, and half an hour later, a sumptuous dinner was ready. The MacLehoses invited Xia Yu and Li Qian to share the meal.

After dinner, as she had done the previous time, the wife of MacLehose took Li Qian's arm and left, leaving the living room for the two men to talk business.

After taking a sip of tea, MacLehose sighed and said, 'Mr. Xia, today is already the 3rd of September, and there is not much time left in my term.'

'If I think about it, I came to Hong Kong in 1971, and less than two years later, an unprecedented stock market crash broke out. Hong Kong's economy and social order suffered huge shocks and destruction. The period of the stock market crash was the most difficult time for me, but I survived it.'

'Over the past nine years or so, I have considered myself responsible for the people of Hong Kong, and Hong Kong has become more and more prosperous in my hands.'

'But I never expected that, at the end of my political career, when Hong Kong had successfully regained its prosperity and surpassed its pre-1973 achievements, there would be another stock market crash, destroying the prosperous Hong Kong to such an extent.'

'This is an unprecedented blow to me, who am already 64 years old.'

'Can you imagine how I feel?'

Throughout the conversation, MacLehose kept his gaze fixed on Xia Yu.

Xia Yu could truly feel that MacLehose was speaking from the heart.

Of course, Xia Yu also sensed a meaning in MacLehose's eyes, as if they could see through the world — I know you played a big role in this stock market crash.

Xia Yu was not surprised, as MacLehose, as the Governor of Hong Kong, must know more than the average person.

What's more, this stock market crash began precisely because Jiuding Securities gave up competing with the Swire consortium, so he was indeed inextricably involved.

Xia Yu said with emotion, 'Governor, I can understand how you feel.'

'I also know that this stock market crash is related to me, and for this, I apologise to you.'

'But the main responsibility for this stock market crash does not lie with me. Even if I did not compete with the Swire Group, this stock market crash would have happened anyway. Perhaps it would not be as violent as it is now, but the end result would not be better than it is now.'

MacLehose invited Xia Yu over tonight, not to question him, but to seek his help.

And he really wants to know how Xia Yu views this stock market crash. If he can find out all the reasons from Xia Yu, he can then deal with them in a targeted manner.

'Mr Xia, what do you think caused the stock market crash that only hit Hong Kong this time?'

'Governor, my think tank has analysed the causes of the stock market crash and they are...'

Xia Yu had already basically told Wang Ping the answer to this question before, so now that Murray MacLehose asked, he told the story with ease. MacLehose listened very attentively, just like a primary school student listening attentively in class.

In Xia Yu's narrative, the struggle between him and the Swire Group was only an incomplete introduction. The signs of the stock market crash appeared when the Hong Kong Association of Banks raised interest rates, and his struggle with the Swire Group temporarily masked and postponed the stock market crash.

The most critical reasons for the outbreak of the stock market crash were, respectively, problems with the economic structure of Hong Kong itself; the stock market was not regulated enough; and the mainland's stance on the future of Hong Kong.

The collapse of the Carrian Group's fraudulent business and the resulting bank bankruptcy were two major events that helped to exacerbate the stock market crash.

After hearing Xia Yu's account, MacLehose suddenly felt enlightened, and his resentment towards Xia Yu dissipated considerably.

With the cause identified, MacLehose had some confidence in reducing the losses from this stock market crash, and felt that inviting Xia Yu over tonight had been a wise choice.

He solemnly asked Xia Yu, 'Mr Xia, in your opinion, to what extent will this stock market crash reach its lowest point?'

Xia Yu thought for a moment and said uncertainly, 'It's hard to say, it depends on the severity of the consequences of the banking crisis. Three banks have already collapsed today, and there are many more banks that have been dragged down by the Carrian Group, and these banks are also on the verge of bankruptcy.'

'And there are quite a few banks affiliated with the Swire Group. I didn't expect the Sze family to be so crazy as to let the Swire Group shoulder such a high debt. Now the Swire Group and the Sze family definitely won't be able to repay the debt. If this causes some banks to go bankrupt, then the problem will be even more serious.'

'It's not impossible for the Hang Seng Index to fall below 500 points!'

With this last sentence, Xia Yu was mostly threatening MacLehose. Anyway, as long as he doesn't exaggerate when talking about uncertain things, it's fine.

If he really intervened, it would be his credit if the Hang Seng Index did not fall so low.

After listening to Xia Yu's words, MacLehose looked remorseful and sighed, saying, 'In that case, I am also responsible. I should not have granted so many bank licenses at once two years ago, causing so many small banks with weak risk resistance to appear.'

Xia Yu comforted him, saying, 'Governor, you don't need to blame yourself. This has little to do with you. Even if there were no small banks, the Carrian Group would still find other banks to borrow from, and the debt pressure would be transferred to other established banks.'

MacLehose laughed at himself and didn't dwell on this point.

After gathering his emotions, he said solemnly to Xia Yu, 'Mr Xia, at the moment, the only person in Xiangjiang capable of saving this stock market crash is you. I hope you can step forward and do me a favour, and also do all the citizens of Xiangjiang a favour.'

With such a high hat placed on Xia Yu's head, he could not retreat, and he did not want to retreat either.

He said with a serious face, 'Mr Governor, Xiangjiang is my hometown. As a member of Xiangjiang, it is my duty to contribute to its economic development.'

MacLehose said gratefully, 'Mr. Xia, thank you!'

'Governor, I wonder where you would like me to start?'

After Xia Yu had finished asking his question, MacLehose immediately replied, 'The most critical issue at the moment is the crisis of bank runs and bank failures. The three banks that have failed so far are all small banks, but if medium-sized banks or Dah Sing Bank were to fail next, then the problem would become even more serious.'

'I hope that Jiuding Bank can provide these banks with sufficient financial support when they are on the verge of being unable to hold on any longer.'

'As for the banks that have been dragged down by the Carrian Group...'

At this point, MacLehose fell silent for a long time. He did not force the issue, but sighed and said, 'If there is still value in saving them, then save them. I will make an exception and let you take them over at a low price or even for free. If there is no value in saving them... then let them go bankrupt.'

This request was not excessive.

Xia Yu nodded and said, "No problem with this, I will do my best.'

MacLehose revealed a smile and thanked Xia Yu, "Thank you!'

After thanking him, the living room fell into silence, and neither MacLehose nor Xia Yu spoke.

The continued silence was a bit awkward, so Xia Yu thought for a moment and said to MacLehose, 'Governor, the reason I just said is that the banking crisis can be resolved, and the structural problems of Hong Kong's economy are actually being resolved as well. It just takes some time for the Yuen Long Science and Technology Industrial Park to see results. The only thing left is the most critical issue of order in the securities market, which is fundamental to determining the ceiling of Hong Kong's capital market.'

'This must be resolved as soon as possible.'

MacLehose frowned slightly and asked uncertainly, 'Mr Xia, what do you think?'

Xia Yu narrowed his eyes slightly and revealed his true intention: 'The merger of the four institutions is too slow. They are still arguing with each other. At this rate, it will take at least five or six years to create a truly comprehensive stock exchange.'

'Li Fuzhao and the others are too selfish and lack a broad perspective. They are not the people to get things done.'

'I think this matter should be re-planned at the Hong Kong government level, and let capable people do it!'