Extraordinary Genius
Chapter 927 – Invest rationally
Fu Rongqi had noticed about the abnormalities in the Hang Seng Stock market. Because of his relationship with the Head of the Hong Kong financial market, he managed to get accurate statics.
Fur Rongqi and Superman Li suggest to Hong Kong’s financial regulatory body to prepare for Thailand’s financial crisis and implement measures to protect Hong Kong.
Feng Yu knows that for the next two to three months, Soros will not have funds to attack Hong Kong. If he attacks Hong Kong, his funds will be stuck in the Hong Kong market and will miss the opportunity to make money from the other countries’ currencies.
Soros is someone who sees money as the top priority. If he can make a lot of money easily, he will not miss it. He will only point his guns in Hong Kong after he had suppressed the Southeast Asian currencies.
To win so many countries, it will take at least two to three months. What Feng Yu needs to do now is to analyze which country’s currency will plunge the most and fastest. He will short that currency in large amounts and try to make the most out of it.
When Feng Yu was attacking Thai Baht, he had used his hidden funds to buy in a large volume of future forex contracts in several countries. But he did not build a big short position future contract portfolio on SGD.
SGD is a strong currency like HKD. Before Thailand’s economic crisis this time, Singapore had undergone adjustments to its financial markets, and Singapore’s banks do not have as many bad debts as Thailand.
Feng Yu had ranked the countries in Southeast Asia. Macau, Singapore, Hong Kong, Japan, and Taiwan are the hardest to attack. Thailand, Malaysia, Indonesia, Philippines, and South Korea are the easiest. China and North Korea, their financial systems had developed much later and have closed-door policies, and it is the hardest to attack. Yes. North Korea’s economy is the most stable because they don’t even have a stock market!
Feng Yu and Soros start to move. They quickly build up short position future contracts on SGD and sell off the SGD they borrowed for USD.
After that, they used their USD to buy in SGD and repeat the process again and again. This had a strong impact on SGD rates.
Singapore is using a Managed floating rate system, and this system makes the SGD more resistant to external factors. The SGD will adjust its rates quarterly and will adjust its foreign reserve proportion. When SGD is adjusting their rates, they will use the Crawling Peg system to lower risk.
This arrangement will protect the rates, lower the impact from external factors, and prevent inflation.
If Singapore had not buy-in several billion USD worths of Baht and cause SGD rates to fall, Soros would not pick SGD to attack.
Thailand had dragged Singapore down with them and gave Soros and Feng Yu this opportunity.
Soros told Feng Yu that SGD would be affected, and he forecast SGD will fall more than 20% in the coming days.
Feng Yu laughed it off. With Singapore’s Forex policies, I can still believe SGD will plunge by 20% at the end of the year. But to fall more than 20% in the coming days? You must be trying to trick me again!
Soros told Feng Yu this was to trick Feng Yu get his funds stuck in SGD, while he makes money in the other countries. If Feng Yu bet heavily on shorting SGD, he will suffer losses, and this is what Soros wanted.
The Asian Financial Crisis cannot be prevented now, and Soros does not need Feng Yu’s help anymore. Many international speculators are following the trend, and his Quantum Fund will lead them to attack those countries’ currencies.
Of course, Soros is not confident that Feng Yu will fall for his lies. After all, during their attack on Thai Baht, he had noticed Feng Yu and his team are elites. They had made many accurate decisions.
Feng Yu might also have the support of Hong Kong’s tycoons and can easily escape with their help.
But if Feng Yu sought help from those tycoons, Soros will be happier. This way, the threat in Hong Kong will be lowered, and it will be easier to attack.
Many Hong Kongers are unaware that Soros had started his attack on Hong Kong. But he did not suppress HKD or the stock market. He had pushed up Hong Kong’s stocks.
By the time Soros pushed the stock market to a historical high, he should have reaped the profits from Malaysia, the Philippines, and the other countries. It’s just in time to use the profits from those countries to attack Hong Kong’s financial market.
When that happens, The Hang Seng index will crash. Even when the HKD maintained its rates, but Soros will still make a killing from the stock market. It will even be better if he can drag China down with Hong Kong.
China’s financial market started very late and have few financial experts. If Soros can enter the Chinese financial market, he can make at least a few billion USD.
Soros can even make China’s economic collapse, and no other country can threaten the US’s status as the world’s leader.
Every few years, Soros can pick and choose a country to attack its financial system and increase his wealth. He will forever be a legend in the finance industry!
Oh, Feng Yu had started to build his future contracts against SGD. But the amount is not too big. Is he testing the market?
Fine. I will trick him into thinking that I will be going all out against SGD and will be shorting SGD in large amounts. After I successfully withdraw from the Singapore market, Feng Yu’s funds will be stuck there.
“Boss, the Quantum Fund is increasing its portfolio. Should we follow them?” He Zhaoji asked.
“What’s your opinion?” Feng Yu asked him back.
“I think we should not follow him. Singapore is using the Managed Float system, and we can make a profit from it, but the profit is not high. I think the Indonesia market is more vulnerable, and this is what we had discussed.” He Zhaoji replied.
“Hahaha. That’s right. You all have the same idea as me. But we must still increase our funds for the Singapore market slightly, as Soros will increase his investment into the Singapore market. Use 10% more of our funds to short SGD, and see if Soros will follow.”
Soros is trying to make Feng Yu increase the amount he short for SGD. But Feng Yu is trying to do the same to Soros too. By continuing to issue orders, the profits will get lower, and risk will increase. To minimize the risk, more funds must be used to hedge against it.
Soros can see this, but does he thinks I don’t know about it? Do you want to trick me? I also want to trick you.
Although Feng Yu knows that both he and Soros will not suffer any losses by doing this, but using so many funds on SGD will lower their profits in the other markets. This is also considered a loss.
After Feng Yu increases 10% of his funds, Soros continued to increase his future contracts. He is determined to lead Feng Yu into this trap.
But Feng Yu smiled and instructed He Zhaoji. That’s everything we will be using on SGD. We must be rational when it comes to investment!
Translator’s notes.
Managed float regime
https://en.wikipedia.org/wiki/Managed_float_regime
Crawling peg