Financial News
Written by: Zhang Weilun
2020-06-10 11:36
Last update date: 2020-06-10 11:36Kyle Bass, the founder of Hayman Capital, who claims to be short on the prospects of China and Hong Kong from time to time and claims to be short on the Hong Kong dollar, once again attacked the Hong Kong dollar. According to "Bloomberg" reports, Bass has raised funds and bought a bearish Hong Kong dollar option with a leverage of 200 times to obtain generous investment returns. If he bets his clients wrong, he will lose all the principal.
The report pointed out that Bass is bearish on the outlook of the Hong Kong dollar, and the Hong Kong dollar is expected to be delinked from the US dollar in the next 18 months. The newly-raised fund is betting on Hong Kong dollar options with 200 times leverage.
The report pointed out that the fund pointed out to investors that if the Hong Kong dollar depreciates by 40%, investors will get a return of 64 times; if the linked exchange rate system is still alive in the next 18 months, the fund will lose all its funds.
The Hong Kong community did not know why Kyle Bass attacked the Hong Kong dollar. (Profile picture)
No disclosure of the size of the Hong Kong dollar fund
As for the size of the funds raised by Bass? The report pointed out that I don’t know how large the funds that Bass has raised, and also pointed out that the new fund will manage client funds for at least 2 years and charge a lump sum of 2% management fee; if the final fund return rate reaches 100%, Bass will The performance fee charged increased from 15% to 20%.
Before the financial crisis in 2008, Bass successfully predicted the collapse of the US property market and became notorious. He is bearish on the Hong Kong dollar this time. It is related to the demonstration against Hong Kong by the Chinese government, the social instability and violence in Hong Kong since October last year, coupled with the rise of Sino-US relations and the new coronary pneumonia epidemic. Bring pressure.
In fact, many investors in the past have tried to attack the Hong Kong dollar. Kyle Bass is one of them. Last year, he himself pointed out that the Hong Kong government proposed to amend the fugitive offenders regulations, which caused social instability.
However, for many years, overseas investors' sniping against the Hong Kong dollar has been unsuccessful. Even the senior investor Soros eventually failed in 1998.
The Financial Secretary Chen Maobo has repeatedly stated that the HKMA has the ability to drop the linked exchange rate system. (Photo by Zhang Haowei)
Caiye expressly defends the Linked Exchange System
After the National People's Congress announced the case of the National Security Act in late last month, the exchange rate of the Hong Kong dollar weakened, and the forward exchange rate fell below 7.83, which has aroused the public's concern about the outflow of funds from Hong Kong. However, recently, many Chinese stocks have returned to Hong Kong for the second listing, coupled with factors such as half-year settlement and dividend payment. Recently, the exchange rate of Hong Kong has strengthened, and it has repeatedly touched the 7.75 strong party exchange guarantee. Since last Friday, the HKMA has undertaken US dollar selling 8 times to inject Hong Kong dollars into the market.
At the same time, according to Bloomberg data, current Hong Kong dollar option investors expect that the chance of the Hong Kong dollar against the US dollar falling to the 7.9 level next year will be 6%. For the time being, Bass’s plan to attack the Hong Kong dollar may not make them profitable.
The government and the HKMA have also repeatedly pointed out their ability to defend the linked exchange rate system. The Financial Secretary Chen Maobo pointed out that Hong Kong has a foreign exchange reserve of US$440 billion. At the same time, there is a US dollar and Hong Kong dollar exchange agreement between the HKMA and the People’s Bank. Hong Kong provides US dollar liquidity.
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Chen Maobo Hong Kong dollar exchange rate linked exchange rate system
