Chapter 159 – Getting more loans
writer:穷四      update:2022-08-22 14:03
  Feng Yu knew that the lies about getting news from the senior leaders would be shocking to Fu Guangzheng. He hoped that with the news, Fu Guangzheng would be about to convince his family to loan him the money or help him get a loan from the Hong Kong Banks.

  Fu Guangzheng, including his family, had assumed that Feng Yu had strong backings all this while. On the surface, his parents might be farmers, but maybe, he had strong connections which were not known to others!

  If Feng Yu does not have strong backings, how could he have gotten this news? How could Feng Yu trade with the Soviet Unions and how could he use the Soviet trains to transport his goods? Especially if Feng Yu does not have access to insider news, why would he dare to invest everything he had into Treasury Bonds when he started out?

  Maybe Feng Yu had a third grandpa or a 2nd grand uncle working at the Central or had connections with the senior officials there, and was able to get access to information about the policies what was about to implement. This might be the reason why Feng Yu was able to earn from all his investments. This news Feng Yu gave to Fu Guangzheng must be from his backers in the dark.

  So, it seems that there will be listed companies in China soon?

  Fu Guangzheng called his father and told him about the news Feng Yu told him and also said to him that Feng Yu wanted to get a 3 years loan from them with compounding interests of 10%.

  Fu Rongjin questioned further and found out that Feng Yu wants to get a loan to invest in China’s stocks and it’s still not any particular stocks. Feng Yu wanted to purchase all sorts of available shares in the market. He felt that this was something unusual. Even if China’s stocks had potential, but not every stock will make money. There should not be a lot of companies that will be listed initially and will there be many people in China that will buy shares?

  Fu Rongjin contacted the rest of the family and told them that Fu Guangzheng had got some news. The Yen will rise, and Japan property market will collapse. China’s stock exchange might be opening soon, and there will be listed Chinese companies soon.

  The head of the Fu family, Fu Rongqi was an expert in the financial market, and his company had done research. The US had already intervened with Japan’s economy, and the rising of Yen will benefit the US.

  He had a wait and see approach, but after hearing the news from Fu Rongjin, he also felt that there would be at least 80% possibility of the Yen rising. Although China’s economy had just started to pick up, the growth was at an amazing pace. China had the top personnel in their economic planning committee and undoubtedly will have access to more reliable information compared to him.

  But the Fu family’s 2nd brother, Fu Rongqu, does not agree with the news. How could Japanese property market collapse? He felt that the world’s top economy should not be the US. It should be Japan. The Japanese stock market was flourishing, and Japan was the most advanced in technology and innovations. Furthermore, there were lots of Americans and Europeans investing in Japan’s property market. How could it collapse?

  Fu family’s 3rd brother, Fu Rongbing, kept quiet. Earlier, his eldest brother and the fourth brother had set up a distribution company to distribute a new type of humidifier. Both had made lots of money from the US and Europe. His 2nd brother had invested in the Japanese property market, and the property prices had been rising. Only his company did not have any developments.

  This time, his 4th brother said that he received news from the big boss in China about investments and he came over to hear about it. But when he heard that it was investing in China’s stock market, he was not interested. China was still a backward country and how could they set up a stock exchange and allows companies to be listed in a short period of time?

  As for loaning money or being a guarantor, he would never agree. He did not get to earn a single cent previously and now got to be a guarantor? No way!

  “Big brother, you think this news is reliable?”


  “I believe it. Tomorrow I will be doing more Yen futures. The faster the Yen rises, the more I will earn!”


  “Big brother, don’t forget that the Yen had already risen a lot recently. You still think that it will rise further?” Fu Rongqu sneered.

  What news from China’s top leaders? How can China be compared to Hong Kong when it comes to getting reliable news?

  “2nd brother and 3rd brother, do you all want to invest in the humidifier company? Each of you gives me 50 million HKD, and I will sell some shares to you.”


  Fu Rongqu and Fu Rongbing’s eyes shined. Their eldest brother wants to sell his shares to them? This showed that their elder brother wants to take care of them and at the same time, he wanted to invest more into forex futures. He wants to bet that the Yen will rise further!

  Fu Rongqu does not have 50 million HKD cash. However, when he thinks of the profits of the humidifiers which were higher than his investments in properties, he decided to sell his properties in Japan at a slight loss to raise funds.

  “4th brother, how much does that Manager Feng wants to borrow?”


  Fu Rongjin replied: “Big brother, don’t worry. I will be the guarantor for him.”


  The eldest brother was the best in investments compared to his three other brothers. Now the eldest even wanted to lend Feng Yu the money. He might as well be the guarantor and let Fu Guangzheng be the one who gave Feng Yu a favor.

  When Hong Kong is returned to China, he might get the first mover advantage to enter the vast China market. His assets might even overtake his eldest brother.

  Fu Rongqi looked at his 4th brother and nodded: “Ok. Just go according to your plan. This Manager Feng is not simple.”


  ……


  “You had helped me contacted Hong Kong's Citibank and HSBC?”


  Feng Yu was happy. This Fu Guangzheng had agreed to be his guarantor in the end. Feng Yu still had something valuable in his hands which were the stocks. The stocks he bought were valuable and could be used as collateral.

  Feng Yu had used his companies’ assets as collateral to get loans and used the credits to purchase stocks. He would use the shares as collaterals to get more loans. This was like how the property developers in the future years get repeated loans.

  Getting a loan to buy a land parcel and then mortgage the land to another bank to get a loan to complete the buildings. This way, the property developers would only need to come up with only 10% of the whole investment and the rest were from the banks.

  However, this practice came to a halt and was considered a violation of lending regulations. Companies that indulged in such practices were blacklisted, and they will have difficulties in getting future loans.

  The reason given by Feng Yu for getting a loan was to invest in trades. It was considered a misappropriation of funds when he spends the money in stocks. However, if no one reported him, the authorities would not care. But if Feng Yu carried on getting loans from China’s banks, he would be found out, and he might be jailed.

  Getting a loan from Hong Kong was different. The banks in China had no way to find out. The Hong Kong banks only look at the value of the collaterals, and with Fu Rongjin as the guarantor, he could get a significant amount of loan safely.

  The most important thing was this amount would be more than what the Fu family can lend him!

  “How? Is Manager Feng satisfied?” Fu Guangzheng asked happily.

  “I wonder how much can these 2 banks lend me?”


  “How many shares do you have?”


  Feng Yu showed one finger: “100 million RMB!”


  “How much? 100 million RMB!” Fu Guangzheng was shocked. He knew that Feng Yu had invested a lot in China stocks, but he did not expect the amount to be so big. 100 million? Feng Yu’s companies don’t need cashflows?

  If it weren’t for Tai Hua Trading working with the suppliers for a long period of time and were allowed to have a 1-month credit term, Feng Yu would not dare to do this. He cannot stop the trade with the Soviet Union as this was the connection with Kirilenko.

  As for the machines and technologies bought from the Soviet Union, Feng Yu would collect the deposits first and send to Kirilenko. When the buyers paid up the remaining amount after they collected their machines, he would transfer to Kirilenko. This way, he does not need to use too much cash.

  Feng Yu was putting his everything into this!

  “100 million. Fine. With so many shares and my father as the guarantor, there should not be any problems getting at least 100 million RMB!”