How much did Soros lose in losing Hong Kong shares? Most family funds are reluctant to follow suit

category:Finance
 How much did Soros lose in losing Hong Kong shares? Most family funds are reluctant to follow suit


Rumors are vivid, especially on September 5 when Soros Fund sold Hang Seng Index short positions to recover losses. It was unexpected that the electronic trading system of the Hong Kong Stock Exchange malfunctioned and the derivatives market was suspended, which led to the loss hopelessness. As Hong Kong stocks continued to rise on September 6, the Soros Fund eventually lost about HK$2.4 billion in claims.

Many Hong Kong private equity fund managers interviewed by 21st Century Economics Reporter generally believe that Soros Fund has been transformed into a family fund due to the return of external investorsfunds before, without periodic announcement of position changes. Therefore, it is difficult for the market to understand the loss situation of its guaranteed airport shares through its position changes. Moreover, Soros Fund may also take nominal account to participate in the arbitrage of the airport shares, which makes it more difficult for the outside world to understand the actual loss of the airport shares.

Nevertheless, even if Soros participated in the sale of airport shares, it could not represent the investment attitude of the vast majority of large family funds and family offices in Europe and the United States. A founder of Hong Kongs large-scale private equity fund, entrusted by many large family offices in Europe and America to participate in A-share and Hong Kong-share investments, revealed that at present, the vast majority of large-scale family funds and family offices in Europe and America have not included guaranteed airport shares and Hong Kong dollars in their investment scope at all.

One reason is that Hong Kong, China, has more than 400 billion US dollars in foreign exchange reserves, and the central government of China has more than 3 trillion US dollars in foreign reserves as backing. They know that it is difficult to replicate the 1997 Asian financial crisis and to arbitrage Hong Kong dollar short shares. The other reason is that they believe that Hong Kong, Chinas economy still benefits from Chinas economic transformation. Because of the steady growth of the type of development, the rash sale of the Hong Kong dollar and Hong Kong shares will increase their investment risk.

In fact, the rumors of Sorosgus failure in Hong Kong Airport shares are giving some overseas speculative capital a considerable deterrent, forcing them to cut short positions in the Hong Kong dollar and Hong Kong stocks in an effort to protect themselves. The founder of Hong Kongs large private equity fund is outspoken.

Reporters have learned from many sources that the recent rumors of Sorosgus failure in airport shares are becoming the focus of attention in Hong Kongs financial market.

Were also learning how much money Soros actually spent on buying shares in airports, and how much money he ultimately lost. A Hong Kong private equity fund trading director told reporters frankly. But he believes that even if Soros actually participated in the selling of airport shares, he would have limited funds to use.

On the one hand, at the end of 2017, he transferred about $18 billion of his wealth to OpenSocial Foundations, the charity foundation he founded, which reduced the investment quota of Soros Fund accordingly. On the other hand, in October 2018, Soros split up his private equity team and promised to redistribute more than $2 billion to the latter, leading to a further increase in its fund assets. Step by step. More importantly, in view of the large fluctuations in the global economy in previous years, Soros continued to substantially reduce the amount of his macroeconomic investment strategy.

Moreover, Soros is unlikely to bet unilaterally on the decline of Hong Kong stocks. According to his operation during the Asian financial crisis in 1997, he will bet on the decline of Hong Kong stocks and depress the Hong Kong dollar substantially, which will trigger a substantial outflow of capital and a sharp fall in Hong Kong stocks, thus doubling the winning chance of his short-selling strategy. He analyzed it. Over the past two months, the exchange rate between the Hong Kong dollar and the US dollar has been hovering between 7.8250 and 7.8450, without touching the exchange rate floor of 7.85. Therefore, the conditions for Soros to sell Hong Kong shares on a large scale are not necessarily mature, which makes him less likely to go his own way.

However, given the total foreign exchange reserves of US$3.5 trillion between the central government of China and the HKSAR government, if Soros does not have sufficient capital leverage support, he may not dare to sell the airport shares in a large scale and directly challenge the governments ability to intervene. He pointed out. Moreover, after the outbreak of the Asian financial crisis in 1997, Soros Funds every move in the Asia-Pacific region has been closely monitored by the financial regulatory authorities of the Asia-Pacific countries, which has resulted in its actual empty selling operations being restrained everywhere.

Reporters have learned that some speculative capital has retreated and short positions in the Hong Kong dollar and Hong Kong stock market have been sharply reduced.

In fact, they have no idea whether they can succeed in selling Hong Kong dollar shares. On the one hand, they cant find a champion, which puts their short selling behavior into a predicament of high and low. On the other hand, the current financial regulatory authorities in Asia-Pacific countries have accumulated a lot of experience in dealing with speculative capital rush, which has made them put a rat in the trap. The Hong Kong large private equity partner pointed out.

Most European and American family funds are reluctant to follow suit.

In the view of many Hong Kong private equity fund holders, even if Soros Fund participates in the sale of airport shares, it is only a lonely widow behavior. The reason is that the vast majority of large family funds and family offices in Europe and America are on the opposite side of him.

The founder of Hong Kongs large private equity fund, which has been entrusted by several large family offices in Europe and America to invest in A shares and Hong Kong shares, told reporters that despite the recent downturn in Hong Kongs short-term economic data, none of these large family offices and family funds in Europe and the United States have proposed strategies to sell Hong Kong shares, even in customized investment strategies. They also did not include the Hong Kong dollar in their investment considerations.

Reporters also learned that some large family funds in Europe and the United States are now planning to list the assets of RMB and Hong Kong stocks linked to Chinas economy as an independent asset class, and the investment quota is not less than 5% of the total assets of the fund, accounting for about 60% of the total investment quota of its emerging market.

A representative of a large European family fund in Hong Kong told 21st Century economic reporters that they did not think the Soros Foundation was investing heavily in airport shares. Because during the Asian financial crisis in 1997, he was able to sell Asian and Pacific currencies such as Hong Kong dollar, Thai baht, Philippine dollar and their stocks successfully, mainly because he had a keen insight into the fact that after the high economic growth in these countries, their huge external debt burden may not support the exchange rate to continue to fluctuate smoothly. Now Hong Kong does not have the economy that it faced in 1997. The problem is that only social problems lead to the decline of short-term economic data, so it is inappropriate for him to invest heavily in airport shares.

Source: Responsible Editor of Economic Reporting in the 21st Century: Wang Xiaowu_NF