The New Year passed almost without notice.
After staying in Hong Kong for a few more days following the holiday, Lin BaoCheng's aunt Lin Yan and her family returned to the United States.
Lin Yan's family had already grown accustomed to living in America. Given the choice, they preferred to work there, so their arrangements would have to wait until Lin BaoCheng himself went to the U.S.
They did not refuse the good jobs Lin BaoCheng intended to arrange for them. They already knew he was a billionaire. When relatives prosper, no one is unwilling to benefit a little, to make their own lives more comfortable.
This New Year was a busy one for Lin BaoCheng, mainly because many executives came to his home to pay their respects.
Not only Chinese managers like Cheng YuFeng, An Yuan, and Liu YiHui, but even foreigners like Wei Li came to offer New Year greetings. Though Wei Li and the others didn't celebrate the Chinese New Year themselves, having lived in Hong Kong for many years they knew this was the season. Now that their big boss was Lin BaoCheng, if they didn't show up to pay their respects, it would mean they had learned nothing from years in the workplace.
Though busy, Lin BaoCheng warmly received the visiting executives and found time to chat with them. Fortunately, only management came; otherwise, he truly wouldn't have been able to host them all.
February 13th, the seventh day of the lunar new year, happened to be a Monday. Most companies in Hong Kong resumed work that day.
Lin BaoCheng's companies also officially reopened on that day.
On the first day back, Lin BaoCheng went to HSBC to meet Shen Zhou.
He was no small figure now. He contacted Shen Zhou only shortly before, and Shen Zhou immediately said he had time.
They met in Shen Zhou's office, exchanged a few pleasantries, then got down to business. Lin BaoCheng explained the purpose of his visit.
"Mr. Shen, here's the situation. I want to invest in gold futures, using leveraged financing. HSBC should have this service, right?"
For Lin BaoCheng, all investments in the coming years would be in gold futures. Only when gold prices peaked and collapsed in 1980 would he shift funds elsewhere. With such a guaranteed profitable direction, why choose anything else?
"There's no gold futures trading in Hong Kong, but London has it, and HSBC offers the service. How much capital does Mr. Lin plan to use, and with how much leverage?"
For business delivered to his door, Shen Zhou was naturally pleased. He thought to himself that selling Hutchison Whampoa shares to Lin BaoCheng last time had been the right move; otherwise, this deal would never have come to HSBC, since they had had no prior cooperation.
"I plan to use 150 million U.S. dollars as principal, with five‑times leverage."
Lin BaoCheng personally had 200 million available. Hutchison Whampoa, after borrowing 500 million HKD from HSBC and liquidating short‑term investments, could free up 150 million USD. Altogether, Lin BaoCheng had 350 million USD to invest in gold futures.
He intended to channel Hutchison Whampoa's 150 million USD investment entirely through HSBC. As Hong Kong's largest bank, and since he had no private bank of his own yet, he was naturally willing to cooperate with HSBC.
The reason for using only 150 million USD through HSBC was that Lin BaoCheng also wanted to maintain relationships with Standard Chartered and Mitsubishi Bank. Moreover, putting all funds through one bank wasn't ideal for risk management. Splitting the investments among three banks would spread the risk.
"So much?!" Shen Zhou was startled. Though he handled large sums regularly, 150 million USD at once was no small matter — over 600 million HKD. And with five‑times leverage, it meant Lin BaoCheng would be trading with more than 600 million USD in gold futures.
"Mr. Lin, this is no small sum. Are you sure you want to commit so much to gold futures? The futures market is volatile and unpredictable. With five‑times leverage, a one‑percent loss equals five percent of your principal — that's 7.5 million USD, over 30 million HKD."
Shen Zhou offered a word of caution. Since Lin BaoCheng was sincere about cooperating with HSBC, he hoped for long‑term partnership and didn't want to see his assets shrink drastically.
"Thank you for the reminder, Mr. Shen. I know what I'm doing," Lin BaoCheng said with a smile. With a guaranteed profitable investment, he had no intention of changing course.
"As long as you're confident," Shen Zhou replied. He couldn't force Lin BaoCheng to listen; it was his money, after all.
"Five‑times leverage is no problem. Since Mr. Lin is giving HSBC this business, we'll offer a discount on the financing interest."
"Then I must thank you, Mr. Shen," Lin BaoCheng said. "I plan to use this leveraged financing for one year, so HSBC should give me a favorable rate. I'll have Wei Li send someone to negotiate the details with HSBC. What do you think?"
"For a whole year? No problem!" Shen Zhou was surprised. Lin BaoCheng seemed to treat the futures market as a long‑term investment. Did he even understand the rules? Futures were usually short‑term trades. Long‑term positions existed, but rarely with leverage, since interest costs were heavy.
After leaving HSBC, Lin BaoCheng went to Standard Chartered to meet with its taipan, Huo YaoHua. They agreed on 100 million USD in leveraged financing, also at five‑times leverage.
Later, Lin BaoCheng returned to Hutchison Whampoa and informed Wei Li of his investment plan. Wei Li strongly opposed it, believing futures were too risky, especially with five‑times leverage. The risk was magnified.
With 150 million USD in principal, if Hutchison Whampoa lost it all, the company would be finished, unable to recover. Even partial losses would be a heavy burden, since Hutchison Whampoa already owed over a billion HKD in debt.
But Wei Li's opposition was useless. Lin BaoCheng was determined, and Wei Li had no choice but to send people to HSBC to negotiate interest rates.
At Standard Chartered, since the funds were Lin BaoCheng's own, he had An Yuan lead the negotiations.
Because it was only about interest rates, the talks concluded that same day: five‑times leverage, one‑year term, annual interest rate of 9% — the same as the bank's small‑loan rate.
HSBC and Standard Chartered gave Lin BaoCheng a rate of 8%, since he was borrowing large sums and for three years. The banks offered him a one‑point discount.
This wasn't special treatment for Lin BaoCheng alone. For any large loan, banks adopted the same attitude.