Video Game Empire - Chapter 693

In another time and space, after reaching its peak in early 1998, the Hong Kong property market fell by 70% in the next five years. The most important reason for this is, of course, the accumulation of a lot of bubbles in the early stage. With the outbreak of the Asian financial crisis, local speculators went bankrupt and international investors quickly left, causing the bubble to burst instantly. Therefore, after reaching its peak in early 1998, the Hong Kong property market plummeted by 40% in just over a year.

Another reason for the worse is that after the return of Hong Kong, the new SAR government launched an “85,000 plan” in order to curb the rising housing prices and improve the tight housing supply in Hong Kong at the same time.

The so-called “80,000 Five-Year Plan” refers to the supply of no less than 85,000 new residential units each year. As a result, the Hong Kong government has increased land supply since the second half of 1997, and the first batch of houses under the “80,000 Five-Year Plan” began to be listed on the market in 2000.

At the time, Hong Kong’s property market, which had just experienced a slump, was being suppressed to its lowest level in nearly a decade. At this time, the listing of a large number of new residences has seriously exacerbated the oversupply situation and has become the last straw that crushed the Hong Kong property market. So Hong Kong housing prices, which should have started to recover slowly, plummeted again by 30% in the next two or three years.

Real estate can be said to be the most important part of the assets under the name of most ordinary Hong Kong people. In the five years after 1998, Hong Kong housing prices have fallen by 70% cumulatively, causing almost every Hong Kong person to suffer heavy losses. This directly led to a rapid surge in public dissatisfaction with the new government, and finally led to a major political incident in which hundreds of thousands of people took to the streets.

Since then, the Hong Kong government has been completely coerced by the will of the people and has begun to deliberately control land supply to stretch housing prices. The annual supply of new residential units in Hong Kong has even fallen to less than 8,000 at its most exaggerated.

In this specially created situation of short supply, the Hong Kong property market has been rising for more than ten years since 2004. Even the subprime mortgage crisis that shook the global economy only caused Hong Kong’s housing prices to drop slightly for two quarters.

Before Li Xuan’s rebirth, Hong Kong people began to complain that the authorities did not control housing prices ineffectively, and that their salary increases were being swallowed up by faster-rising rents. It can only be said that the port-government in another time and space has unfortunately not been able to step on the right step, so that one step is wrong, step by step, and finally the opportunity to solve the problem of high housing prices in Hong Kong is completely missed!

In this time and space, Hong Kong was influenced by Li Xuan, and the development speed of remote areas in the New Territories such as Tuen Mun and Yuen Long was much earlier than in another time and space. After the Governor of Newport, Mak Robin, took office, he even threw out a large-scale development plan for the New Territories. After Vice-Governor Dong took office in 1994, he immediately kicked off this huge plan.

So by the end of 1996, the part of the land for which the development right was granted at the earliest in 1994 had already been built one after another and put on the market for sale. According to statistics from the relevant departments, in the half year from July to December 1996, 52,000 new residential units were built and sold in Hong Kong.

Under the impact of large-scale new real estate, the upward trend of Hong Kong property prices has finally been completely suppressed!

At the same time, after nearly three years of brewing, the Asian financial crisis has finally begun its first round of climax!

After nearly a year of fighting with the international hot money, the Thai government defended the three waves of large-scale attacks on the Thai baht exchange rate by the international hot money, and finally failed to withstand the fourth wave of attacks, which was announced on February 1, 1997. Abandoning a fixed exchange rate and letting the baht float freely sent the baht tumbling 17 percent against the dollar in a day.

In the following month, the Malaysian ringgit and the Indonesian rupiah also announced their losses. International speculators have begun to turn their attention from Southeast Asia to East Asia, and Hong Kong, a free port and financial center in Asia, is the first to bear the brunt.

The reason why the exchange rate systems of Southeast Asian countries such as Thailand, Malaysia, and Indonesia are unable to fight back against the attack of international hot money is that these countries not only bear huge foreign debts, but also have extremely empty foreign exchange reserves. Hong Kong is different, not only has its own foreign exchange reserves of up to 80 billion US dollars, but also has a big backer behind it with 150 billion US dollars of foreign exchange reserves – China.

In 1997, it was the time of the return, and it was naturally impossible for the mainland side to sit back and watch Hong Kong’s economy collapse. But it is precisely because of the approaching of 1997 that Hong Kong’s stock market and property market are in a period of irrational and crazy skyrocketing, driven by the good news of the return.

In order to resolve the rapid rise in housing prices in Hong Kong, Li Xuan simply replaced the governor of Hong Kong, promoted the development of the New Territories that had never been seen in time and space, and suppressed the rapid growth by changing the structure of supply and demand. In contrast, it is much easier for Li Xuan to control the Hong Kong stock market!

You must know that the market value of just one company of the Oriental Research Institute accounted for 20% of the total market value of Hong Kong stocks at the beginning of the listing. The price-earnings ratio of Oriental Research Institute was still low when it went public. The company’s stock price performance in the past five years was better than the average level of Hong Kong stocks. By the beginning of 1997, the market value had accounted for 22% of the total market value of Hong Kong stocks.

After HSBC moved back to the UK, Jiahua Group has become the second largest listed company in Hong Kong stocks after the Oriental Research Institute. Its market value now accounts for almost 10% of the total market value of Hong Kong stocks. In addition, Oriental Group’s local listed companies in Hong Kong include Asia Entertainment Group, the largest media company in Hong Kong, and Jiachuang Technology, the world’s largest LCD panel manufacturer. The combined market value of these listed companies can account for 40% of the total market value of Hong Kong stocks.

And if you count the three listed companies under the name of Li Xuan’s eldest brother Li Ke, as well as other companies that have close cooperation with the Oriental Group, then Li Xuan’s control over the entire Hong Kong stock market will appear even more terrifying.

Under normal circumstances, Li Xuan will naturally not personally intervene in the stock market~www.mtlnovel.com~ But the Asian financial crisis is different. If Li Xuan does not act, once the Hong Kong economy is hit hard, it will seriously affect the development rhythm of Oriental Group.

Therefore, as early as 1996, Eastern companies have continuously increased their efforts to absorb funds from the secondary market through a series of means such as reducing their holdings and issuing new shares, thereby restraining their stock prices from rising too fast.

After Thailand announced that it would abandon the exchange rate of the baht, the Oriental Research Institute and Jiahua Group issued a profit warning at the first time. After that, many oriental companies also issued announcements, and they have significantly lowered their performance expectations for the next few quarters, thus actively pouring cold water on the hot Hong Kong stock market.

Therefore, when the international hot money ended its hunt for Southeast Asian countries and began to shift its focus to Hong Kong, the Hong Kong stock market fell by 20% in more than two months, and the active ebb tide has been completed, so that international capital wants to link the foreign exchange market and the stock market. It is much more difficult to short Hong Kong stocks while aggressively shorting the Hong Kong dollar.

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