Special interviews
Written by: Xu Shihao
2021-02-06 07:30
Last update date: 2021-02-06 07:30
The former U.S. President Trump, at the end of his term, escalated the relationship between China and the United States from a "trade war" and a "technology war" to a "financial war." As an international financial center, Hong Kong has also become a target of US sniping, including prohibitions. US investment in China Mobile (0941) and other blue chip stocks, so that the manager of Tracker Fund (2800) State Street Global, also once stated that it would not increase its holdings of the affected HSI constituent stocks.
In the 1998 financial turmoil, the Hong Kong government entered the market to fight against predators, and finally delisted with the help of Profit and Rich.
Feng Zhijian, the former managing director of BOCI Securities and the permanent honorary chairman of the gold and silver industry trade fair, was a part of "playing the predators". Although the Tracker Inc. incident was temporarily brought to an end, as the Sino-US relations deepened, Feng Zhijian said frankly that the Hong Kong government It is necessary to understand the situation as soon as possible, and to take on more responsibilities in the financial market as it did when "rescuing the market".
At the end of his term, former President Trump issued a series of orders prohibiting investment in Chinese stocks.
(Profile picture)
The U.S. dollar dominates the international monetary and financial system, and its U.S. dollar transaction clearing service is a "weapon of mass destruction." However, at the end of his term, former President Trump eventually issued a series of bans on investment in Chinese stocks. Americans invest in companies suspected of having relations with the Chinese People’s Liberation Army. Among the constituent stocks of the HSI, China Mobile (941, 2.33%), CNOOC (883, 1.17%) and China Unicom (762, 0.25%) are also on the list , The "nuclear option" is not used.
However, the impact of the ban has also gradually emerged: Earlier, nearly 500 warrants were delisted by U.S. investment banks; State Street Global, the manager of Tracker Fund, which tracks the constituent stocks of the HSI, also stated that it would not increase its holdings. The affected Hang Seng Index constituent stocks, but later reverted, announced the resumption of investment.
Financial veteran: the Hong Kong government must take responsibility
It is a fact that the United States has implemented "long-arm jurisdiction" by using the US dollar status to try to block the investment of international funds in China. How to minimize the impact is a problem for Hong Kong financial system officials to think about and deal with.
In response to US sanctions.
Feng Zhijian, former managing director of BOCI Securities and permanent honorary chairman of the gold and silver industry trade fair, said in an interview with "Hong Kong 01" that the Hong Kong government is "not okay or unable to submit" on the issue of "financial sovereignty."
He pointed out that as an independent market, one should not only consider how to "cooperate" with the policies of other countries. "To win U.S. investors, you have to play with it, but today I play (invest) and listen to it. Will it be fun? You can’t buy a mic, or you can just sell it out and wait for you to buy it. (In the future) only (stocks) will be sanctioned, so let me order?"
The relationship between China and the United States continues to be tense.
(Profile picture)
Although the Tracker Fund incident came to an end with State Street Global’s turnaround, the Secretary for Financial Services and the Treasury, Xu Zhengyu, stated on the 3rd of this month that the fund manager suddenly announced the investment decision and changed it within a short period of time. The market has caused unnecessary chaos. The government has expressed concern and has asked the HKMA and the Tracker Fund Supervisory Committee to follow up seriously.
Before the Secretary spoke, independent stock commentator David Webb and member of the Executive Council and former Monetary Authority President Ren Zhigang spoke successively, implying the need to change the manager to a non-US-funded background, but "how to change" and "who to do it" at any time It caused another storm.
Feng Zhijian believes that the government should take action as soon as possible. If State Street insists on its original intention, the impact is not light. "You can't delay it. As long as the calculated price of the fund unit deviates from the real HSI, there will be a lot of arbitrage. Many derivative products are developed based on funds, and many people have been exhausted by doing it."
The State Street incident is like "fighting predators" policy makers must protect the market
The emergence of Tracker Funds originated from the Asian financial crisis in 1998, when the Hong Kong dollar, local stocks and futures markets continued to be attacked by speculators.
In order to combat predators, the Hong Kong government used about 118 billion yuan of exchange funds to enter the market and purchase a large number of constituent stocks to stabilize the linked exchange rate.
Feng Zhijian, who was still the managing director of BOCI Securities at the time, recalled that on the evening of August 13, 1998, he suddenly received a call asking him to have a meeting with Ren Zhigang the next morning, "Immediate deployment became an operation. In just half a month, On August 28th, some terminals are not allowed to do other things, and they are ready to make government orders at any time; secondly, they have to give out a phone number, so that someone can call you, so I (the government) will call you first. You are the direct line."
There were only 33 constituent stocks in the Hang Seng Index that year. It pushed the Hang Seng Index from about 6,600 to 7,600 in half a month. What impressed him was the last day of the "guard war". He was the main force on August 28. Purchase HSBC (0005), "Buying and buying are all at the price of five cents. The picture looks like a "scaffolding", it looks like three or four-wire stocks, and the picture is my (broker's) number. ."
In the end, the "predators" retreated, and after the government intervened, the market was considered stable. However, Hong Kong is still a free market. Many people questioned the government's decision to enter the market, believing that it interfered with market development.
Feng Zhijian said with a smile that it will not be until the 2008 financial tsunami that the US government intervenes in the market to rescue the market, and the doubts will only fade.
The State Street Global Incident this time is the same as when it entered the market to "fight predators." He believes that the government must play an important role. "If the market is unstable, the government should respond? Market rules are messing up. You need to consider it. It’s a medium to long-term issue, and it’s not just about this single event. If a decision maker wants to protect the market, it’s like entering the market that year and making a decision.”
Feng Zhijian pointed out that the relationship between Tracker Fund and State Street Global is like "boss" and "wage earners".
(Profile picture)
He emphasized that the relationship between Tracker Fund and State Street Global is like "wage earners" and "boss." State Street, as a "wage earner", must clearly recognize its own role, "You are not an investor, or you invest in stocks." , You are on medicine, not food and medicine.” If State Street fails to follow the instructions and track the HSI constituent stocks, it will be “fired”, “You don’t have to change it, you don’t follow the (index), You don’t even have the ability to do it, so please do it? Do you please? The boss asks the staff, you can do it all, I want to keep you?”
MPF | State Street re-accepts sanctioned stock BCT UnionPay: continue to seek the most appropriate solution
Tracker Funds | State Street "Slingshot" re-accepts the HSI, which caused chaos due to sanctions by the Monetary Authority
State Street Global Turns to Tracker Fund to resume investing in HSI sanctioned stocks tomorrow
Ren Zhigang: If the Tracker Fund fails to keep up with the Hang Seng Index, State Street is not suitable to be the manager of Tracker
Tracker Fund Monetary Authority China-US Trade War China-US Relations
