At 18 Harbour Road, Wan Chai, the tallest building in Hong Kong, the 66th floor of the Central Plaza Building, this entire floor is the office residence of a company called Far East Financial Investment Company. And the boss of this Far Eastern Financial Investment is none other than Liu Ruanxiong, a well-known "bone removal expert" in the Hong Kong stock market!

At half past eight o'clock in the morning of August 25th, there was still an hour and a half before the opening time of the morning market of the Hong Kong Stock Exchange, and all the employees of the company, including Liu Ruanxiong, the big boss, were already in place, and everyone knew very well that from today onwards, the final decisive battle between the Hong Kong government and international tour capital was about to start.

Because the 28th of the end of each month is the last settlement day of the current month contract of Hong Kong futures. A large number of short contracts for August HSI futures in the hands of Tiger Fund, Quantum Fund and other major bears must be closed before the market closes on the 28th.

Their previous average opening price was around 11,000 points, while the Hang Seng Index closed yesterday at 11,054 points. In other words, based on yesterday's closing price, the current floating loss of international funds per futures contract is 2,700 Hong Kong dollars.

If they want to turn losses into wins, they need to suppress the Hang Seng Index to less than 11,000 points before the market closes on the afternoon of the 28th. Of course, if international investors continue to be bearish on the Hang Seng Index in the long term, they can actually choose to deliver the August contract first, and then re-open a position to buy the September short contract. However, just yesterday, the Hong Kong Futures Contract Exchange announced that starting from next month, customers holding more than 10,000 HSI futures contracts will be subject to a special margin of 150%, that is, the margin of each HSI futures contract will be adjusted from HK$80,000 to HK$120,000.

In other words, if international investors are ready to continue to fight with the Hong Kong government in Hang Seng Index futures in September, then their opening costs will increase by 50% compared with the original, which is undoubtedly a huge pressure on highly leveraged futures trading. Therefore, the main bears are likely to choose to have a decisive battle with the Hong Kong government in the last four trading days of August!

"Liu Sheng, are you sure you want to buy a large number of shares of the Oriental Research Institute as soon as the market opens?" The trader looked at his watch, there were still five minutes before the stock market opened today, so he turned his head to his boss behind him, and finally confirmed the trading order.

"Don't be afraid, as long as I don't shout to stop, I will sweep in as many shares as there are in the Oriental Research Institute! We are pursuing long-term value investment this time, even if the stock price of the Oriental Research Institute has fallen recently, it is a big deal to put it in a year or two, and I don't believe that the stock price will not rise back!" Liu Ruanxiong said in high spirits.

His bold remarks made the others in the trading room confused, you must know that their Far Eastern Group Investment has always only engaged in short-term speculation, and long-term investment is not their field of expertise at all, could it be that the boss has been demoted?

The confusion did not last long, less than five minutes after the opening of the Hong Kong stock market, the Oriental Research Institute issued a major transaction announcement, in order to promote the shareholder structure of the listed company to be more diversified, the company's board of directors and management agreed to introduce IBM and Texas Instruments as strategic shareholders.

The Oriental Research Institute will issue 200 million shares and 100 million ordinary new shares to the two companies respectively by way of share exchange, of which the shares of the Oriental Research Institute will be valued at HK$220 per share. Of course, the two deals still need to be approved by the relevant authorities in Hong Kong and the United States if they are to be finalized.

After the completion of the transaction, IBM and Texas Instruments will hold 6.67% and 3.33% of the shares of Oriental Research Institute, respectively, and will become the company's second and third largest shareholders, respectively, with one board seat.

The reason why Li Xuan suddenly introduced two strategic shareholders was also due to the consideration that the Oriental Research Institute would be able to develop better in the next step! After all, the business of the Oriental Research Institute in the past few years has always been mainly personal consumption products, and it is relatively weak in the enterprise market and the government market.

IBM, on the other hand, has a customer base of government departments, the military, banks, large enterprises and scientific research institutions. Terminal consumer products are its weakness, so when IBM competed with Aikang in the field of personal computers, it can be said that it has repeatedly failed.

As for Texas Instruments, it has become the largest semiconductor company in the United States after Intel's collapse. However, Deyi's strength lies in industrial semiconductors, such as various chips in the field of medical equipment, aerospace, and industrial automation control, and Deyi has a huge market share!

The main business of these two companies does not have much competition with the Oriental Research Institute, but can join forces to a certain extent to achieve complementary advantages. What's more, a 10% stake will not affect Li Xuan's absolute control over the company, but Li Xuan can enter the board of directors of IBM and Deyi through a share exchange.

Moreover, after the completion of the share exchange transaction with IBM and Deyi, the Oriental Research Institute can also follow the endorsement of these two companies to further dispel many concerns about itself in Europe and the United States.

Not to mention the impact of these two equity transactions on the future development of the Oriental Research Institute, at least for the Hong Kong stock market on August 25, 1997, it is like a powerful bomb!

The Oriental Institute's closing price yesterday was HK$195, down nearly 20% from its peak of US$240 at the beginning of the year. But IBM and Deyi are now willing to accept shares of Oriental Research Institute at a price of HK$220 per share in a share swap deal with the Oriental Institute.

This is undoubtedly saying that the current actual stock price of the Oriental Research Institute is far undervalued. Therefore, in less than an hour after the Oriental Research Institute issued the transaction announcement, the company's stock price was quickly raised to 215 Hong Kong dollars, an increase of 10%, by the surging buy orders.

As a super company that accounts for more than one-fifth of the total market capitalization of the Hong Kong stock market, Oriental Research Institute's share of the Hang Seng Index is also frighteningly high, at 40%. As a result, with the soaring stock price of the Oriental Research Institute, the Hang Seng Index was also pushed up by more than 400 points at once.

This is undoubtedly an unprecedented super black swan for the bears of the Hang Seng Index! Based on the calculation of 50 Hong Kong dollars for the 1-point index, in just one hour, each short HSI futures contract has a floating loss of more than 20,000 Hong Kong dollars.

The total margin of a contract is only 80,000 Hong Kong dollars, and many short contracts with relatively low positions have instantly touched the warning line of liquidation, and they may be forced to close their positions at any time without margin call.

The Hong Kong government, as the main force of the bulls, naturally will not let go of this good opportunity to beat the water dogs, and began to frantically buy other blue-chip stocks except for the Oriental Research Institute. Finally, at the close of the market on the 28th, the Hang Seng Index was pushed up to 11,700 points. After this battle, the entire short side lost more than 20 billion Hong Kong dollars, which can be described as a big loss of vitality!

Under normal circumstances, it is impossible for Wall Street not to leak the slightest rumor in advance of a multibillion-dollar share swap transaction involving billions of dollars between the Oriental Research Institute, IBM and Deyi. You must know that in addition to hedge funds such as Tiger Fund and Quantum Fund, Wall Street investment banks such as Goldman Sachs and Morgan have also participated in the encirclement and suppression of Hong Kong dollars and Hong Kong stocks.

However, the Wall Street investment bank that brokered the share swap transaction was Hilson-Lehman Corporation, which was previously acquired by Li Xuan, so the confidentiality can be done very well. And about the negotiations between these three companies, in fact, as early as last year, there were various rumors.

However, it is said that there was a big disagreement between the American company and Li Xuan on the valuation of the Oriental Research Institute, and in the end, the two sides were forced to suspend the negotiations because of the big differences. As a result, the market gradually stopped paying attention to this news.

But this is actually just a smoke bomb released by Li Xuan, and the differences between the two sides are not as big as the outside world thinks. Li Xuan deliberately dragged the progress of the negotiations, just waiting for the right time to kill some people by surprise!