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Hong Kong billionaire Thomas Kwok treated my margin account unfairly  

Today Hong Kong billionaire 67-year-old Thomas Kwok said outside Stanley Prison after serving just over three years of his five-year sentence. He was granted an early release for good behavior.

Thomas Kwok, the former co-chairman of Hong Kong’s largest developer, Sun Hung Kai Properties Ltd. and Sun Hung Kai Securities Ltd. was found guilty in 2014 of conspiring to bribe the city’s former No. 2 official Rafael Hui in exchange for favorable treatment for the company.

In 1989 I had a margin account with Sun Hung Kai Securities Ltd and my major holding was Henderson Land which was the largest land owner in Hong Kong at that time. Henderson Land was selling at HK$7.60 per share.

During the Tiananmen protest the Chinese military shot dead about 1,000 protestors. As a result, the Hong Kong stock market crashed and the price of Henderson Land dropped by 50%. Sun Hung Kai Securities tried to contact me to regularise my account. But I was travelling with my wife in Morocco and I was not contactable. Immediately after 3 days, Sun Hung Kai Securities completely sold all my shares at HK $ 3.80 each to their own investment company and I had nothing left.

This is an expensive lesson for me in dealing with dishonest people.

Margin Finance:

I am not afraid to use margin finance because I want to take advantage of the margin finance to buy more shares when it  was selling at lower prices. For example, I use margin finance to buy Dayang at 60 sen per share. As the price goes higher, I could use more margin loan to buy more shares.

As you know, Dayang has been dropping in the last couple of days. If Dayang continues to drop, I will soon have margin call. The best way to treat margin call is to sell a small amount to meet margin call. If the share price continues to drop, I will continue to sell. Even if the price dropped by 50 %, I will still have something left because my average cost is about 80 sen per share.

The Tiananmen Square protests of 1989. 

The Tiananmen Square protests of 1989, also known as the June Fourth Incident in Chinese, were student-led popular demonstrations in Beijing which took place in the spring of 1989 and received broad support from city residents, exposing deep splits within China’s political leadership. The protests were forcibly suppressed by hard-line leaders who ordered the military to enforce martial law in the country’s capital. The crackdown that initiated on June 3–4 became known as the Tiananmen Square Massacre or the June 4 Massacre as troops with assault rifles and tanks inflicted thousands of casualties on unarmed civilians trying to block the military’s advance on Tiananmen Square in the heart of Beijing, which student demonstrators had occupied for seven weeks. The scale of military mobilization and the resulting bloodshed were unprecedented in the history of Beijing, a city with a rich tradition of popular protests in the 20th century. The Chinese government condemned the protests as a “counterrevolutionary riot”, and has prohibited all forms of discussion or remembrance of the events since. Estimates of the death toll range from several hundred to the thousands.

 

 

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