Chapter 1111: The Perfect Financial Overlord

There are many docks in Hong Kong, but the vast majority of them are large docks. There is only one public dock where small boats can berth to pick up and drop off passengers, and that is Queen's Pier, located in Edinburgh Place in Central, Hong Kong Island, adjacent to the Hong Kong City Hall and facing Victoria Harbour.

On 20 May,

Xia Yu stood in front of the floor-to-ceiling windows on the upper floors of the Jiuding Bank Building, looking out at the grand handover ceremony taking place at Queen's Pier.

This was a very special day.

It was because the new Hong Kong Governor, Peter Murray, had arrived at Queen's Pier to hand over power with MacLehose on the pier and officially assume office as Governor of Hong Kong.

As he watched the grand celebration, Liu Tianci, standing next to Xia Yu, said with a smile, 'Chairman, it seems that many bigwigs are there to welcome Peter Munro to his new post. When are we going to visit him? Or should we wait until he throws a banquet?'

Xia Yu gave an inexplicable smile at the corner of his mouth and shook his head slightly, saying, "There's no need to visit him. He'll come to us.'

Liu Tianci was taken aback and looked at Xia Yu in puzzlement. "He'll come to us?'

Xia Yu nodded slightly, not hiding it from Liu Tianci, and said softly, 'I have reached an agreement with the British Prime Minister. In the future, in Xiangjiang, I will be in charge!'

'Peter Monroe should have received orders.'

Liu Tianci trembled, looking at Xia Yu, who looked indifferent, with shock all over his face. Immediately afterwards, his heart was filled with immense joy.

If what the chairman said was true, then from this moment on, the sky of Hong Kong would change. The chairman would be able to control everything, from the big shots in business and politics to the common people, all of them would be under the shadow of the Jiuding Group!

What this meant, Liu Tianci could not imagine, but he knew that the time had come for Jiuding Bank to step on the head of HSBC and dominate Hong Kong!

"Wang Qi should be here soon. Tell me about the situation at the Stock Exchange!'

After saying that, Xia Yu turned directly and left.

Liu Tianci once again looked deeply at the bustling Queen's Pier in the distance, with a smile on his face, striding away with his head held high. He wanted to meet with Wang Qi first, so that he could later report to the chairman on the progress of the Stock Exchange.

...

It wasn't long before Wang Qi arrived at the Jiuding Bank Building. After a brief exchange with Liu Tianci, the two men went to Xia Yu's office.

'Chairman, I'm sorry I'm late!'

Facing Wang Qi's apology, Xia Yu waved his hand and said, 'Kowloon is a bit far from Central, you are not late. Sit down, tell me about the specific situation of the Stock Exchange.'

Liu Tianci and Wang Qi glanced at each other, and then Wang Qi said, 'Chairman, from September to March last year, we completed the acquisition of a large number of equity stakes in the four major exchanges. Then on the 18th of last month, we completed the asset integration of the four exchanges, converting all the equity stakes in the four major exchanges into the equity stakes of the Hong Kong United Exchange.'

'After the conversion, the total share capital of the United Exchange was one billion shares, and we held a total of 495 million shares, accounting for 49.5%. However, these shares were spread among companies such as Jiuding Bank, Jiuding Securities, Standard Chartered Bank, Jiuding Insurance Co., Ltd., Island Chiba Bank and Hang Lung Bank. Among them, Jiuding Bank has the largest shareholding of 15%, and is also the largest shareholder of the United Exchange.'

'Apart from us, the second largest shareholder is the Xiangjiang government, with a 10.5% stake and two seats on the board of directors. The Bank of East Asia and Li Fuzhao together hold a 9.2% stake, making them the third largest shareholder...'

As Wang Qi spoke eloquently, Xia Yu gained a concrete impression of the Xiangjiang United Exchange.

In this life, with his intervention, the Xiangjiang United Exchange is fundamentally different from its predecessor.

According to historical trajectory, the Hong Kong Stock Exchange would not have reached this point until at least 1985, but now it has reached this level three years early.

In addition, the Hong Kong Stock Exchange in the previous life was a membership-based stock exchange, while this life is a company-based stock exchange, which is a fundamental difference in the system.

These two systems each have their own advantages and disadvantages, and for people in different positions, the meaning of advantages and disadvantages is different.

A membership stock exchange is an organisation established as a membership association that is not for profit, and is mainly composed of securities dealers. Only members and licensed brokers are eligible to trade on the exchange. Membership stock exchanges are autonomous, self-disciplined and self-governing. The highest authority of a membership stock exchange is the general meeting of members, and the board of directors is the executive body. The board of directors hires managers to handle day-to-day affairs.

For example, the Shenzhen Stock Exchange and Shanghai Stock Exchange in the previous life were both membership stock exchanges.

In contrast, a company-based stock exchange is profit-oriented. It is a company established by various investors who jointly invest and purchase shares. A company-based stock exchange is responsible for guaranteeing the trading of securities within the exchange and must have a compensation fund.

The current Swiss Geneva Stock Exchange, the New York Stock Exchange in the United States, and the London Stock Exchange in the United Kingdom are typical representatives of company-based stock exchanges.

As for the advantages and disadvantages of the two systems of stock exchanges, a brief summary is as follows.

Advantages of a membership-based stock exchange: relatively speaking, the primary goal is not to maximise economic benefits, but to make the exchange platform bigger and stronger.

Disadvantages of member-based stock exchanges: there are more rules, they are less efficient, and the scale of the exchange is expanded more slowly.

Advantages of company-based stock exchanges: because they are not directly involved in the trading of securities, they are in a neutral position during the trading process, which helps to ensure fairness in trading. At the same time, because their main responsibility is to provide the various material conditions and services required for securities trading, their business activities are relatively simple, which is conducive to providing securities dealers with the most complete trading facilities and services possible.

Disadvantages of a company-based stock exchange: Compared to a membership-based system, the maximisation of shareholder profits as the company's primary goal can sometimes harm the interests of other traders for the benefit of shareholders.

For Xia Yu, a capitalist and the financial king of Xiangjiang, a company-based stock exchange is of course more beneficial to him and can more firmly establish his position of power in Xiangjiang.

And in order for Xiangjiang to rise as quickly as possible, the inefficient and slow-expanding model of a membership-based stock exchange is indeed unsuitable.

...

After Wang Qi finished speaking, Xia Yu asked, 'Now, is there a lot of internal discord in the United Stock Exchange? Are people like Li Fuzhao honest?'

This time, it was Liu Tianci's turn to introduce the board of directors.

He shook his head and said, 'Li Fuzhao definitely isn't willing to accept it, but he's a smart guy, so after getting a position as vice chairman of the exchange, he's been more cooperative with the company's various decrees.'

'However, he is also considered the second most powerful force in the exchange. Under his influence, Hu Hanhui, Chen Pufen, Wang Qiming, Hu Baixi and others have all rallied around him. Together, they hold more than 22% of the shares and have four director seats.'

'Our side, on the other hand, has ten director seats. In addition to the nine seats corresponding to our own equity, BOC Hong Kong has also given us the voting rights corresponding to 0.5% of its equity, which has increased our director seats by one. Now we control ten of the nineteen director seats.'

'We are also the majority shareholder of Hang Seng Bank and HSBC, and the directors appointed by these two banks to the stock exchange have always been on our side.'

'Moreover, the two directors appointed by the Hong Kong government are also quite supportive of us, so the merger of the stock exchanges is progressing very smoothly.'

'Now that the new governor, Peter Munro, has taken office, the two directors of the Hong Kong government will definitely stand firmly on our side,'

Xia Yu revealed a smile and said affirmatively, 'Well done.'

'Thank you, Chairman!'

Liu Tianci and Wang Qi immediately replied modestly.

Xia Yu smiled and continued, 'So what procedures does the United Stock Exchange still need to go through, and when will it be officially opened?'