The Sydney forex market, which had opened in a relatively calm atmosphere, suddenly heated up just five minutes after opening, as a flood of Malaysian ringgit sell orders came pouring in.
"Sold 20 lots at 3.02 ringgit!"
"Okay, done!"
"Sold 15 lots at 3.02 ringgit... no, 3.04!"
Neil Briwett, a forex trader at Macquarie Asset Management, shouted urgently as he watched the ringgit plunge off a cliff on his monitor.
"This is massive. Looks like the hedge funds have picked Malaysia as their next target, huh?"
Sitting next to him, wearing a headset mic, Mac Kinnon had just finished placing an order and set down his receiver.
"Isn't it obvious? Damn. They're coming in hot right from the start."
"The sell volume has already exceeded 200 million dollars. Judging by how the orders are all coming from one place, I'd say one big player made the first move. But who?"
Neil's mouth was busy talking, but his fingers were flying across the keyboard.
At that moment, Michael Hills, the head of Macquarie Asset Management's forex trading center, stood up in a white dress shirt and, after hanging up his call, shouted loudly across the floor.
"Listen up, everyone. The one shorting right now is Eldorado Fund!"
Neil muttered under his breath.
"That explains it."
Eldorado and Quantum Funds had been leading the charge in the ongoing currency speculation sweeping through Southeast Asia, so they had already guessed it was one of the two making a move.
"Quantum took a hit in Thailand, then chased after the Philippines a beat too late. Now it looks like Eldorado is pulling ahead."
"Yeah. George Soros's not what he used to be."
Mac nodded in agreement.
Up until recently, if you asked anyone to name the top hedge fund, they would have unanimously picked Quantum Fund.
But the ongoing Southeast Asian currency crisis had changed that perception.
Even now, Eldorado Fund—having made the biggest profits in Thailand and the Philippines—was the one everyone was keeping the closest eye on, more so than Quantum.
And sure enough, Michael the center head raised his voice to order a follow-up attack in line with Eldorado's move.
"Let's not fall behind! Everyone, sell the ringgit!"
At that, the forex traders on the trading floor moved in perfect unison like an orchestra following a conductor's lead, all simultaneously launching into selling the ringgit.
"Sold 11 lots at 3.11!"
"How much ringgit do we have left? What, that's it?"
Michael, the trading center head, yelled into the receiver with a scowl.
"That's nowhere near enough. Pull in everything you can get your hands on—max it out!"
Not just Macquarie—speculators who had pulled out of the peso after the Philippines requested IMF assistance and failed to make much profit—now followed Eldorado Fund's lead and began an all-out assault on Malaysia.
***
Daehung Investment, Yeouido, Seoul.
As the ringgit sell-off that began in Sydney swept into the Tokyo forex market with even greater intensity, the air in the Asset Management Department office grew taut with tension.
"It's dropped to 3.11... no, 3.12 ringgit per dollar!"
At the shout from Yoo Seok-hyun, Jung Hwan-yeop glanced sideways and spoke to Choi Ho-geun, who stood with arms crossed, eyes fixed on the large market board.
"They're going in hard right from the start—sell volume's already topped 400 million dollars."
Without taking his eyes off the screen, Choi replied in a flat tone.
"Compared to the fight over the Thai baht, this is just the first round of betting. No need to make a fuss."
"Fair point."
At that moment, Hong Jae-hee spoke up, her voice tight with tension.
"There's a flood of ringgit buy orders coming in!"
Choi leaned forward to check the monitor in front of him.
Just as Hong had said, a wave of buy orders had begun to push back against the ringgit's freefall.
"Looks like BNM is stepping in to defend," Jung commented.
Choi straightened and nodded.
"If you don't want to get torn apart by a pack of hungry wolves, you'd better get your guard up quick."
"So, does that make us the wolves too?"
Choi gave him a sideways glance.
"Better that than being the prey, don't you think?"
"Can't argue with that."
Jung replied with a grin.
"If we were the ones under attack right now... ugh, just the thought gives me chills."
"Enough chit-chat. The KLCI is at 1,077 points, right?"
"Yes."
Hong answered promptly.
"Then go ahead and short the KLCI futures at 900, just as planned."
"Understood!"
"Got it!"
Jung Hwan-yeop and his team all responded in unison and began placing orders, picking up their phones or typing rapidly on their keyboards.
Watching his team move with such precision, Choi Ho-geun took a deep breath in and exhaled.
Then, his eyes sparkled as he looked up at the large market board displaying the Malaysia Composite Stock Index (KLCI).
"Alright. This is where it begins."
***
[MYR: 3.09 (▲ 0.23)]
Sitting at his spacious desk, eyes fixed on the Malaysian ringgit chart on his monitor, Seok-won murmured to himself with a faint smile.
"They responded quickly, but you can't stop a massive tidal wave all on your own."
Indeed, the buy orders hastily issued by Bank Negara Malaysia (BNM) were quickly overwhelmed by the relentless sell-off from hedge funds, including the Eldorado Fund.
As a result, the brief pause in the ringgit's plunge ended, and the currency resumed its sharp drop.
[MYR: 3.10 (▲ 0.24)]
"Judging by how aggressively they're selling, looks like everyone's on edge after not getting much out of the Philippines."
Unlike the Eldorado Fund, which pulled out early before the Philippine government requested IMF assistance, most other hedge funds had missed the timing.
While they didn't suffer losses, the peso's sharp decline had halted and started to rebound, so they didn't gain as much as expected.
What's more, after seeing hedge funds rake in handsome profits in Thailand and the Philippines, other Wall Street investors who had been on the sidelines also jumped into the forex frenzy, further intensifying the ringgit sell-off.
"At this rate, Malaysia might abandon its fixed exchange rate system sooner than I remember."
Just then, the phone console on the side rang loudly. Seok-won picked up the receiver.
"Yes?"
[President, it's Manager Choi.]
Upon hearing Choi Ho-geun's voice, Seok-won leaned back into his cushioned chair and asked:
"How's the betting going?"
[We're hitting a bit of a snag.]
Holding the receiver to his ear, Seok-won furrowed his brow slightly.
"A snag?"
[We're continuing to place sell orders for KLCI futures from Tokyo and Hong Kong, but almost none are getting filled.]
"You're saying no one's picking up the orders?"
[Exactly.]
Seok-won immediately moved his mouse and opened the KLCI futures trading screen on his monitor.
As Choi had said, a large number of sell orders were stacked up, and the price was indeed dropping.
[Seems like people are bracing themselves, expecting the Malaysian stock market to crash now that the ringgit is under attack.]
"At what price did you place the orders?"
[900 points.]
"If there are no takers even at that price, it means the buying sentiment is weaker than expected."
[That's why I'm suggesting we lower the order price.]
"What price are you thinking?"
Manager Choi cautiously began:
[During our last meeting, you mentioned that unlike the Philippines, Malaysia wouldn't surrender so easily.]
"I did say that."
[If things play out as you said, the Malaysian stock market will likely continue to plunge. If we drop our sell order to 750, I believe the orders will start filling.]
Considering that the current KLCI index was at 1,077, a price of 750 was a drastic 327-point drop.
Still holding the receiver to his ear, Seok-won stroked his clean-shaven chin and said:
"At that level, even in a bear market, there might be some interested parties."
[Exactly my point.]
It was a risky bet—if the Malaysian market didn't fall below 750 as hoped, it could result in serious losses.
'But without taking that kind of risk, no one's going to take the sell orders. We'd end up just watching this round from the sidelines.'
From Choi's perspective, this was his carefully thought-out last-hope strategy.
Tapping his finger lightly on the desk as he gathered his thoughts, Seok-won adjusted his grip on the receiver and said:
"If we're going to take a risk, let's do it in a way that others won't be able to resist buying."
[Excuse me?]
"Not 750—drop it another 100 points. Sell the futures at 650."
[…]
Taken aback by the bold order, Choi reacted with surprise:
[Did… did you say 650?]
"Yes."
Choi couldn't hide his shock and voiced his concern:
[For us to profit at that level, the index would have to be cut in half. Is that even possible?]
"Only at that level will cautious investors start to bite. If even you think it's a stretch, then it's probably tempting enough for everyone else."
[That may be true, but…]
Still visibly unsettled, Choi trailed off.
"Whether it's 750 or 650, we're still taking a risk. In that case, we might as well maximize our returns by selling more futures."
A 100-point difference may not seem like much, but the risk effectively doubled. The words nearly escaped Choi's lips—but he held them back. After all, he was the one who had initially proposed taking the risk.
[But if word gets out that we're shorting KLCI futures, won't other investors try to push the index up against us?]
"That might be true in a normal situation—but not now."
Seok-won responded calmly, his expression full of confidence.
[…]
"With the ringgit collapsing under hedge fund attacks, no one's going to risk going long on KLCI futures just to take us down."
Indeed, even Choi had to admit that sounded right. He nodded silently.
"Once the Malaysian stock market opens, the mood might change fast. Let's get those sell orders in beforehand."
Choi swallowed hard and responded firmly:
[Understood.]
After hanging up, Seok-won stared intently at the frozen KLCI index, which hadn't moved yet since the market was still closed.
"From 1,200 to here… People might think it can't drop much further—but there's always a basement beneath the floor."
A faint smile curled at Seok-won's lips.
To others, it might look like reckless gambling—but it wasn't.
He could make such bold bets because he knew the Malaysian market would crash below 400.
"Given how much more intense the currency attacks are this time, the index might fall even further."