Following Huayi Capital's complete liquidation and exit.
At 10:52 AM Beijing time, Aberdeen Asset Evolution No. 1, one of the main long-position funds in the market, also began comprehensive liquidation for profit-taking.
At the same time, with the outcome of this referendum widely anticipated and most long-position holders in the market having already cut losses or closed positions, numerous short-selling institutions on Wall Street, such as BNY Mellon, Blackstone Group, Goldman Sachs Group, Citibank, and others, also began to liquidate for profit.
"Hey, old friend, you must have made a lot of money speculating on the British pound exchange rate this round, right?"
As the major short-selling institutions entered the profit-taking and liquidation phase, Humphrey, the foreign exchange market hedge fund manager for Blackstone Group, couldn't help but call Frederick, the chief hedge fund manager for Aberdeen Asset Evolution No. 1.
"Speaking of which... we really have to thank you for your earlier reminder in this round of speculative operations. If not... perhaps our institution would be facing the same fate as Vanguard Capital's Amanda Hedge Fund right now."
"The Amanda Hedge Fund managed by Cedric?" Frederick asked. "What happened to that fund?"
"You haven't heard?" Humphrey chuckled, saying, "The Amanda main hedge fund, managed by Cedric, chose to go massively long in this round of speculation on the British pound exchange rate, holding a huge long position. I heard that by the time they finally liquidated to cut losses, the entire fund had already lost over 3 billion US dollars, haha... After this battle, Cedric will probably be down and out for quite some time."
Hearing the news from Humphrey, Frederick responded, "Losing that much, it might not just be a matter of being down and out for a while for Cedric. I estimate that within Vanguard Capital, they might have to choose a new Amanda hedge fund manager."
"Probably not," Humphrey said. "Most of the credit for Amanda's growth from a ten-billion-dollar scale to a twenty-billion-dollar scale still goes to Cedric. Now it's just a loss of profits from several previous large-scale speculative operations. For the Amanda hedge fund and for the entire Vanguard Capital group, it's not a debilitating blow.
However, I heard that Summit Investment Bank and Paris Investment Bank, the two major players in the forex market, suffered heavy losses in this round of speculation on the British pound exchange rate. Several of Summit Investment Bank's main hedge funds incurred huge losses, with total estimated losses approaching tens of billions of US dollars."
"Your intelligence channel... is quite well-informed," Frederick responded. "I only knew that Godfrey, who manages the Summit Universe No. 1 main fund, suffered heavy losses this time. I heard the fund he manages lost over 3 billion US dollars in this round."
"Basically, the entire European capital market was harvested," Humphrey said.
"The biggest loser should still be Britain itself, which proposed the Brexit referendum," Frederick said. "The outcome of this referendum will have significant implications for Britain's future economic development."
"That's for sure," Humphrey said. "With Britain leaving the EU economy, the pound cannot return to its high levels before the Brexit referendum. I estimate that for some time to come, facing the continued slump in the pound's exchange rate, numerous trading institutions in the global offline trade market will further sell off the pound."
"I expect the Bank of England will take further action next," Frederick said. "Previously, the Bank of England abandoned the pound's exchange rate, holding back its last major trump card of selling large amounts of dollar foreign exchange reserves. Now that the short sellers in the market have largely vented, and also have a strong need to cover positions for profit-taking, under these circumstances, the Bank of England is likely to play this last trump card to stabilize the pound's exchange rate."
"Yes, I think so too," Humphrey said. "That's why I chose to take profit now."
"How much did your institution make in this round of speculative operations?" Frederick asked.
Humphrey smiled and said, "Made a little, just so-so, about 2 billion US dollars. This profit... certainly can't compare to your Evolution No. 1 fund."
"2 billion US dollars? That's not bad," Frederick nodded slightly.
"What about you?" Humphrey asked. "How much did your institution make in this round of operations? I remember you were among the first in the market to be firmly bearish on the British pound exchange rate. Your profits from this round of harvesting should be much more substantial than ours."
Frederick responded, "Just so-so, made about 7 billion US dollars in profit."
"Holy cow, how much was that?" Humphrey was stunned. "7 billion US dollars in profit, and you call it just so-so? You're incredible, to be able to make so much."
"Just luck," Frederick said with a smile. "Before the market referendum sentiment completely shifted, our institution was also close to facing extreme stop-loss and margin calls."
"That's true," Humphrey said. "Before the 'Leave' vote gained an advantage this morning, I always thought this referendum was just a public show orchestrated by the British government and its internal politicians for their own political purposes. I never expected... the outcome really would be an accident."
"The result of public opinion being swayed is like this," Frederick said. "Those who think they can control public opinion will always reap what they sow. This Brexit is a done deal, and I estimate that once the entire Brexit procedure begins, the current British Prime Minister will likely resign."
"With such a major 'black swan' event, it's only right to resign in disgrace," Humphrey said. "Financial markets are already anticipating this. Oh... by the way, you mentioned earlier that the strategy to short the pound wasn't initially proposed by you, but by a young man from China. What's that about?"
Hearing Humphrey bring this up, Frederick couldn't help but roughly recount the private meeting he had with Su Yi back then, chuckling, "Don't underestimate this young man from China. I have a hunch that Mr. Su will definitely make a big splash in the global financial market in the future. And... let's pray we don't end up on the opposite side of this young man from China, because if we really do, I honestly don't have the confidence to beat him."
"To earn such praise from you, it proves that Mr. Su is indeed extraordinary," Humphrey said. "Alright, if there's an opportunity in the future, I hope to meet him."
"There will be," Frederick said with a smile.
"When are you returning to Wall Street?" Humphrey asked again.
Frederick thought for a moment and said, "After I'm done with this round of investment matters and the group's new appointment comes through, I don't think it will take long."
"Haha... then congratulations in advance on your return to Wall Street!" Humphrey said. "I've already booked a table at our usual spot, just waiting for you to come back."
With that, the two chatted about some other small talk before hanging up.
And just as they hung up the phone.
In the market, as the results of a small number of subsequent voting districts continued to be announced, the Bank of England, which had previously abandoned the pound's exchange rate, now once again released positive news to the market about selling large amounts of dollar foreign exchange reserves and repurchasing the pound.
Facing this positive news, and also facing the massive covering of short positions in the market after the anticipated outcome was realized.
The British pound exchange rate, even with the referendum outcome largely decided, surprisingly began to slowly rebound and recover from its terrifying intraday drop, from around the 1.3100 mark at 11:02 AM.
At the same time, seeing the pound's exchange rate gradually rebound after the short sellers had fully vented, other funds chasing short positions in the market, as well as profitable short capital, accelerated their pace of covering positions after the expected outcome was finalized and during subsequent market trading hours.
Finally, at 11:47 AM, when all vote counting results from all voting districts across the UK were announced.
That is, with the number of 'Leave' supporters exceeding the 'Remain' supporters by about 1.1 million, and the total turnout for this referendum reaching 46 million.
The British pound exchange rate, instead, rebounded by nearly 200 points from its lowest point of 1.3079, reaching around 1.3260.
However, even though the pound exchange rate had begun to rebound and the Brexit referendum result was formally established, global stock markets and national stock index futures markets were still in a continuous dive.
Among them, the US stock market, where global capital gathers the most and is most closely watched, saw its three major stock index futures continue to plummet, with the Nasdaq stock index futures even showing an intraday drop of 4%.
Due to the continued negative impact of Brexit...
The domestic A-share market, after a period of emotional brewing during lunchtime.
When the market reopened at 1 PM, it plunged by nearly 5%, almost bringing back the spectacle of "a thousand stocks hitting limit down."
However, Su Yi and the traders at Huayi Capital's Hong Kong branch were not overly concerned or focused on the turmoil in the global stock markets at this time.
After completing the liquidation for profit-taking, Su Yi's personal account received funds transferred from the fund account.
He immediately called Fang Wanqing, asking her to help him arrange a meeting with Ms. Li.
So, at 3 PM, while global financial markets were still under the impact of the Brexit storm, Su Yi left the company and went to the agreed meeting place with Ms. Li.
"This card contains 50 million US dollars." Su Yi handed a supplementary bank card to Ms. Li. "I've always been grateful for your help in securing a guaranteed loan from Summit Bank for me, Ms. Li. Now, I'm returning this amount, principal and interest, to you, Ms. Li, and hope you can help me repay Summit Bank."
Ms. Li looked at Su Yi, who was full of vigor, and said with a smile, "I remember I only helped you borrow 30 million US dollars at the time."
"The rest is all interest," Su Yi said with a smile.
He was never stingy with friends who were willing to lend a hand in times of difficulty.
Moreover, it was necessary for him to show goodwill towards the network of connections behind Ms. Li, namely the Huo family in Hong Kong.
"It seems you made a lot of money from the British pound exchange rate market this time," Ms. Li did not decline, taking the bank card Su Yi handed her, and said with a smile, "This morning, the entire Hong Kong city was already abuzz, saying that the Huayi Chengyuan No. 1 main fund, managed by you, in conjunction with Huayin International and Aberdeen Asset Evolution No. 1's main hedge fund trading department, harvested many long-position capital institutions globally, and even made a profit of over 10 billion Chinese Yuan."
"I did make some," Su Yi responded with a smile. "Just a modest five or six billion US dollars, which is still very far from the original target of ten billion US dollars."
"A modest five or six billion... US dollars?" Ms. Li's eyes widened in disbelief.
She knew that the Huayi Chengyuan No. 1 main fund, managed by Su Yi, primarily consisted of funds he had raised through various loans and personal funds from friends, not investor funds.
This meant...
The five or six billion US dollars in profit Su Yi earned through this fund was essentially his personal wealth.
What did five or six billion US dollars mean?
At this time, throughout the entire Chinese community, a net worth of five or six billion US dollars could place one among the top fifty richest Chinese individuals.
It could basically be said that with this one battle, in terms of wealth, Su Yi could be on par with her husband's family, the entire Huo family.
While Ms. Li was astonished.
Fang Wanqing, hearing the numbers Su Yi uttered, was also completely stunned.
She was in venture capital, and a fortune of five or six billion US dollars was enough to leverage many large international projects.
Moreover, let alone cash flow, just a valuation of five or six billion US dollars could basically put one among the top 100 private enterprises in China.
She couldn't imagine Su Yi earning so much money from this one battle.
Seeing their extremely surprised expressions, Su Yi smiled and said, "The foreign exchange financial market is inherently a step to heaven and a step to hell. I can only say... I just happened to win this gamble."
"This... truly can be called a colossal gamble," Ms. Li scrutinized Su Yi again.
She knew that from this moment on, this young man before her was truly different from before.
"It's fine," Su Yi said. "Lady Luck just happened to favor me."
"I followed the voting process of this Brexit referendum and the previous market long-short battle," Fang Wanqing said. "It was indeed extremely dangerous for you to hold out until the end and exit with profit. I heard that in this round of the pound exchange rate long-short battle, in our Hong Kong City... Tianhe Capital, Mitsui Sumitomo Hong Kong City Investment Company, and the Summit Universe No. 1 main fund all suffered heavy losses.
Among them, Tianhe Capital Company now has many investors who previously invested in Tianhe Capital funds gathered at its entrance, demanding an explanation from Gu Chijiang, the boss of Tianhe Capital, and hoping to forcibly redeem their fund shares."
(End of Chapter)