Starting in March 2000, the Federal Reserve interest rate has been lowered from a high of 6.25 to the current level of 1.75. As the economy rebounded, it completely ignited the U.S. real estate market.
For more than three years, stimulated by the release of liquidity by the Federal Reserve's interest rate cuts, the prices of completed houses and existing houses have increased significantly every year.
The cumulative increase in real estate across the United States ranges from 60% to 80%, and prices in some white, middle-class residential areas with good security have even doubled.
In the United States, it is very common to buy a house with a loan.
Major banks in North America are doing their best to seize the housing loan market, and preferential loan policies are emerging one after another, including even 10% off down payment and zero down payment discounts.
As long as customers spend a small amount of money to pay the insurance premium, they can move into a spacious and bright villa with a swimming pool. This includes a large number of high-risk old black and South American customers.
Some customers with poor credit records or unstable income are defined as subprime credit borrowers because they cannot meet the bank's loan standards.
For banks, this part of subprime mortgage lending is a high-risk, high-yield business because its loan interest rates are much higher than average.
In the face of huge benefits, there are always people who take risks. However, banks know the danger and do it, so they hope to share the bank's risks through the financial market. This is where the CDS contract (credit default swap) appears.
Wall Street's Lehman Company packaged these risky assets, designed a complex package of subprime loan assets, and then used them in the financial market to make huge profits.
HSBC is different and is completely unaffected by these market chaos.
Still choose a minimum down payment of 30%, you must provide stable and reliable income proof or resume, and we will never relax the income review of applicants.
Although it has made little money from this housing loan boom, HSBC doesn't care at all.
How much money can you earn with a loan with a base interest rate of 1.75?
The Royal Fund’s one-time acquisition of Hong Kong’s Cheung Kong Holdings and Hutchison Whampoa spent more than 43 billion U.S. dollars in loans, and it took out more than 11 billion U.S. dollars to control Apple. The loan interest rates were both 2.35%. The income was high and the risk was almost zero.
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The expansion of enterprises under the consortium also consumes a large amount of funds.
In HSBC's business sector, supporting Chinese small and medium-sized enterprises in developing overseas business is a top priority, while other large multinational banks have been hesitant to do so for fear of encountering unpredictable risks.
HSBC has no such worries at all. It supports domestic enterprises the most in developing foreign trade, has the widest scope, the best services and the most categories, and can provide global financial services without any blind spots.
It has a great reputation in the domestic business community and is the well-deserved first choice.
Just this big chunk;
Hundreds of billions of dollars in short- and medium-term loans can be consumed every year. These are high-income loan projects, and the interest rates are even as high as 6 to 7% or more, making money easy.
Moreover, the bank's value-added services will be more profitable.
International market coaching, channel development, market analysis and research, corporate mergers and acquisitions, listing guidance, cross-border fund settlement, private bank financial management, etc., HSBC relies on its advantages of being based in China and Southeast Asia to cut into the rapidly growing international trade pie.
A big piece.
This part of the profit is stable and generous. Isn't it ten times better than speculating on junk bonds, and ten times better than lending money to a black man to buy a house?
If you don't have that diamond, don't take up the porcelain job. Outsiders would really envy you.
China has been completely open for business since it joined the WTO in 2001. It has only been more than two years since then. It is difficult to eliminate the deep-rooted prejudices in the minds of foreigners.
Therefore, foreign banks have a lot of funds in their hands but have many concerns about this and that, and they have given up on this blue ocean market in vain.
Wang Yaocheng knew that this was completely unfounded. HSBC's business in the mainland was more extensive and larger than it had ever been in history, and the benefits would naturally be better.
There is money in the pocket, which strengthens the confidence for European expansion.
On September 2, 2003, Motorola's board of directors rejected the plan to acquire Huawei, believing that the merger would cost too much cash and carry too much market risk, so it should be halted decisively.
September 11, 2003
Hong Kong's Global Telecom acquired British O2 Telecom, a subsidiary of Telefonica, for 8.7 billion pounds ($13.92 billion), marking the first merger and acquisition in the British Isles.
British O2 Telecommunications Company was separated from BT, the largest telecommunications company in the UK. The company is headquartered in Slough, England. It is currently the tenth largest telecommunications company in Europe and the third largest in the UK.
The British telecommunications company O2 has a total of 13.3 million users in the UK, Ireland and Germany, and is trying to expand its mobile network on a large scale within the EU to gain more market space.
Currently, the company is building a large-scale third-generation GSM wireless communication network. This huge project is expected to cost US$6 billion, which is why Telefonica is overwhelmed.
soon after
This cross-border merger and acquisition of Global Telecom was approved by the Markets and Competition Authority, the British antitrust regulator, and passed by the European Antitrust Commission, successfully completing the merger.
From then on, the process of Wang's consortium's buying and selling in Europe started, causing Europeans to exclaim loudly, "The God of Wealth is here..."
Hong Kong stated;
O2 Telecom will re-examine O2 Telecom's third-generation GSM wireless communication base station expansion plan throughout the EU. It plans to use base stations and network equipment from Cisco and Huawei to more than triple the scale of expansion to about 10 billion US dollars, covering the EU
Population range of up to 87 million.
If this investment plan is realized, the scale of British O2 Telecom will quickly rise to the top five in Europe, and its market value will be greatly increased.
Because the price of Huawei's third-generation wireless network base station equipment is much lower than that of its European counterparts, the construction scale has more than doubled while the investment amount has less than doubled.
From the original plan to cover 33 million European users, to now covering 8,700 user groups, it truly reflects Huawei's competitive strength of low price and good quality.
After the news broke, the London financial market responded enthusiastically.
The value of British O2 Telecom's shares soared from 7.16 billion pounds before the merger to 9.35 billion pounds, showing market participants' strong confidence in the company.
There is no other way, I have big thick legs, and I have enough money in my pocket to talk with confidence.
Out of their always arrogant hearts, some people in the industry expressed different opinions on this, believing that Huawei's products have not been tested in the international market and their reliability is not worthy of trust. Many European telecom manufacturers have concerns.
Many European telecommunications company executives said privately;
This time, Hong Kong's Global Telecommunications Company is going to suffer a big setback.
The boss king will definitely pay for his arrogance. They have prepared a small bench to serve as a crowd and are waiting for a good show to be staged.
Wang Yaocheng scoffed at these rumors. The third-generation GSM wireless network mobile equipment developed by Huawei has been professionally tested by the wireless communication technology research laboratory of the consortium, and all indicators have reached the world's advanced ranks.
The price of base station equipment is only 54% of that of its international counterparts. The truly high-quality and low-priced equipment will help Hong Kong Global Communications Company quickly expand into the European market. The two are a perfect match.
Adding in the backbone communication optical fiber cables produced by Corning and Cisco's related network access core equipment, the orders of more than 10 billion US dollars are divided equally between the three companies.
In the meantime, Huawei President Ren also gave a heartfelt guarantee;
"Chairman Wang, Huawei is extremely grateful for your precious trust. The entire company will never let down the ardent expectations of its partners and will repay you with the best market applications and the most complete after-sales services. I dare to issue a military order here.
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Regarding Mr. Ren’s request that the Royal Family Fund can invest in shares, Wang Yaocheng replied;
"We brothers have grown too fast and are too big. If we are tied together to have an iron goal, the Americans will never let us go.
Let me show you a clear way;
Full employee shareholding is definitely not a wise choice. The best option is to be listed on the Hong Kong and New York markets like Hong Kong Global Communications Company.
If you want to develop into a global multinational company, you must not only seek resource allocation globally, but also develop small and medium-sized shareholder groups with consistent interests globally.
Corporate strategic partners are all unreliable. When crises come, they disappear faster than a rabbit. Only the small and medium-sized shareholders who are trapped are the most reliable, because they cannot escape.
For Huawei, the best way is to list in Hong Kong and London at the same time.
We can lose the US market, but we must not lose the EU market at the same time.
Weigh the advantages and disadvantages of the two and choose one, and let the vast number of European small and medium-sized shareholders stand closely with you. The larger the scale of the company, the safer it will be, which will help to resolve the danger of strong suppression that it may face.
If you want to list in London, HSBC can also provide listing sponsorship services.”
By the way, Wang Yaocheng secured another big business for his consortium Core Bank.
Mr. Ren thought about it for a long time, then sighed and said, "Brother, I have learned a lesson from my true knowledge."
October 11
HSBC announced that it plans to issue an additional 25% of its shares to raise a total of 28.75 billion pounds (46 billion U.S. dollars). Its major shareholder Royal Capital expressed its full support. The additional funds are intended to be used to fully acquire Paris Fortis Bank at a price of 28.6 billion U.S. dollars, and to fully acquire Paris Fortis Bank at a price of 19 billion U.S. dollars.
The bank acquired Bavaria Bank in Germany to achieve expansion in the European financial market, and the shortfall was made up by HSBC's own funds.
It is used to improve the layout of banking outlets in Europe and further expand the scope of banking operations.
After three days of trading suspensions on the London and Hong Kong stock exchanges, HSBC successfully completed its additional stock issuance, raising a total of 28.75 billion pounds (US$46 billion) for corporate expansion and completing its planned additional issuance of new shares.
After HSBC's large-scale merger and acquisition expansion, Royal Fund participated in most of the rights issues, and its equity dropped from the original 63.7% to 57.6%, still firmly holding the controlling stake.
After the merger was completed, HSBC's market value further expanded to about 170 billion pounds, worth about 270 billion U.S. dollars, not far from Citibank, which ranked first.
HSBC's actions in exploring the European market were swift and powerful, hitting two heavy blows at the first move, and its appetite was simply frightening.
European financial figures have commented on this;
HSBC frequently takes action, disrupting the European financial landscape and causing qualitative changes. The future direction is thought-provoking.
London has further strengthened its important position in the European financial map and highlighted its role as an international financial center.
A storm is coming in the French and German banking circles, and it is doubtful that the market structure will be restructured.
Barbarians are knocking on the door, where will the EU financial market go?