Chapter 88: Influence

On October 19, 1987, the Dow Jones Industrial Average plummeted 22.6% in a single day, triggering a global stock market crash. Citigroup's investment division suffered massive losses and began shrinking its global operations.

In September 1988, affected by layoffs, Citigroup Hong Kong executives Du Huilian and Liang Botao resigned one after another and joined forces to found Peregrine Investments.

Because both Du and Liang were well-known figures in the Hong Kong financial industry, they received support from giants such as Hutchison Whampoa, Hopewell Holdings, and CITIC International after starting the business. Their development was extremely rapid; by 1995, their assets had grown from 300 million to nearly 20 billion, making them the largest investment bank in Asia outside of Dongying and the largest local securities firm in Hong Kong.

On March 8, 1995, Peregrine welcomed a very special client. This person opened an account with 2 million USD and operated on the New York foreign exchange market using the Japanese Yen with 100x leverage. He only traded twice a day, entering with a full position and exiting with an empty one, and he never missed a beat; the returns were astonishingly high.

On March 8, the Japanese Yen exchange rate rose then fell. This person bought at the 88.60 price point and sold at 91.90, earning over 7.4 million USD.

On March 9, the Japanese Yen exchange rate fell then rose. This person sold at the 92.50 price point and bought at 90.10, earning over 24 million USD.

In just two short days, he turned 2 million USD into over 30 million USD. The efficiency of making money was higher than robbing a bank, which naturally alarmed Peregrine's General Manager, Liang Botao. On the morning of March 10, after listening to the trader's report, he asked in disbelief: "He places orders by phone every night and never comes to the business department to watch the market?"

"Yes, he calls every night at 9 o'clock to ask about the opening price of the New York foreign exchange market, then has me preset the buy and sell prices to trade automatically via computer."

"Every time, he buys and sells with a full position?"

"Yes."

"Are the buy and sell prices he presets always successfully traded that same day?"

"Yes, and they all execute near the day's high and low prices, with a difference of only a few points. His judgment is exceptionally accurate!"

The foreign exchange market has trillions in capital flowing through it every day, and the Japanese Yen is a popular currency. While the long-term direction might be predictable, the daily minor fluctuations have no pattern at all. Liang Botao did not believe anyone could see things that accurately. He examined the account opening documents on his desk and asked: "Have you met him in person?"

"I saw him once when he came to open the account. He is a young man in his 20s, very tall, speaks Mandarin, and looks a bit like Leon Lai. He should also be from Beijing."

"Leon Lai? He was only born in Beijing... Where does this client named Di Ye live?"

"The Macau Suite on the 24th floor of the Mandarin Oriental Hotel."

Hong Kong's Mandarin Oriental Hotel only has 25 floors. Since the 25th floor is a restaurant, the 24th floor is the highest floor for guest rooms. It is known for its luxury and prestige, and the Macau Suite is the best among them.

Given Liang Botao's status, a suite at the Mandarin Oriental was nothing, but considering Di Ye was from the mainland and his background was unclear, visiting rashly would be somewhat abrupt. After pondering for a moment, he said: "Tomorrow is Saturday, and the New York foreign exchange market is closed. If he operates like this again tonight and still makes a huge profit, notify me immediately."

"Understood."

There is a 12-hour time difference between Hong Kong and New York, so when the New York foreign exchange market opens, it is 9:00 PM in Hong Kong. Liang Botao waited in his mansion until 10:00 PM, but he never received a notification from the trader, so he called the company and asked about the Japanese Yen market.

"The Japanese Yen has been fluctuating within a small range tonight and hasn't triggered Mr. Di's preset prices yet."

"If his preset prices are triggered, how much will the profit be?"

"Exactly 100%."

"Still a full-position operation?"

"Yes."

Liang Botao had a strong memory for numbers and calculated: "His current principal is about 33.4 million, and a 100% return means doubling it. If he can trade successfully tonight, he will have turned 2 million USD into over 66 million in 3 days. It's a miracle!"

"It is. I've been doing foreign exchange for over 20 years, and this is the first time I've seen such a formidable expert."

"Truly formidable. If the trade executes, call and notify me, no matter how late it is."

Around 2:00 AM, the trader called to notify him that the trade was complete, but this time it wasn't bought or sold near the high and low prices; the margin of error was relatively large. After hearing this, Liang Botao was even more impressed and said: "With 30 million USD in capital and 100x leverage, a full-position operation is over 3 billion USD, enough to disturb the market in a short time. Even if the God of Wealth himself descended to earth, he couldn't judge it that accurately. Being able to complete the trade smoothly is already very remarkable."

"That's true."

After hanging up the phone, Liang Botao lay back down, but he had no more sleepiness. Instead, he stared at the ceiling, plotting how to gain Di Ye's friendship. Because after having assets of over 60 million USD, no person with a normal brain would continue to play a heart-stopping game with full positions in the foreign exchange market. He would certainly conduct diversified investments, on one hand to spread risk, and on the other to expand social connections. These businesses were the strengths of international giants like HSBC, UBS, and JPMorgan Chase, and Peregrine could not compete with them.

"What exactly is this Di Ye's background?"

Like Tang Renrong, Liang Botao also became curious about Brother Di's unfathomable methods and mysterious background. After waking up the next morning, he began calling Beijing, Shanghai, and other places to inquire. Liang Botao was known as the "Father of Red Chip Stocks." Since 1992, he had successfully operated the Hong Kong listings of many mainland enterprises, such as Haihong, Shanghai Petrochemical, and Stone Electronic, and his connections were extremely extensive.

After spending over ten minutes making four or five calls, Liang Botao finally obtained key information from Kan Zhidong at Shenyin Securities.

"Di Ye? He went to Hong Kong?"

"Mr. Kan knows this person?"

"I don't know him, but Tang Renrong does. On the day of the 327 Treasury Bond Incident, when I was in Hong Kong meeting with you, this Di Ye was going long on 327 Treasury Bond Futures at Haitong Securities."

"He participated in the 327 Treasury Bond Incident?"

"Not only did he participate, but he also wrote a summary article afterwards, which was published in the *Pujiang Securities News* a few days ago, attracting great attention from the Ministry of Finance and the China Securities Regulatory Commission."

Peregrine had business dealings with many mainland enterprises, and the *Pujiang Securities News* was also a newspaper Liang Botao read every day. However, he rarely paid attention to the authors of the articles, so he had no impression of the name Di Ye. Upon hearing this, he was greatly surprised and asked: "Is it that article, 'On the 10 Major Problems Exposed by the 327 Treasury Bond Incident'?"

"That's the one."

Liang Botao felt this was very important intelligence, so he took out a Fountain Pen and a notebook to ask for Tang Renrong's private contact information. Kan Zhidong gave him a Big Brother mobile number and asked curiously: "Why are you asking about Di Ye?"

"This Mr. Di is currently a top-tier client of our company, and I need to collect some background information."

Kan Zhidong was an insider and not so easily fooled. He smiled and said: "Mr. Liang, we are old friends. Don't beat around the bush; give me a hint."

"I cannot disclose client confidentiality. I can only tell you that this Mr. Di is a financial genius, a super genius!"

After brushing off Kan Zhidong, Liang Botao called Tang Renrong and learned from him that Di Ye was just an ordinary university student with no special family background.

"Can Mr. Tang be sure?"

"I haven't been to Yuncheng, so I can't be sure. But with Di Ye's talent, it doesn't matter who his parents are; he can soar into the sky on his own."

"That's true, I was just asking."

Tang Renrong didn't ask what Di Ye had been doing at Peregrine, but he smiled and reminded him: "Mr. Liang, when dealing with Di Ye, you must always remain vigilant. Otherwise, if you aren't careful, you'll end up working for him for free, and you'll do it willingly."

"Oh? Can Mr. Tang elaborate?"

"I can't explain it clearly. It's probably a kind of special charm. Mr. Liang will naturally understand once you meet him."

Liang Botao wrote down Tang Renrong's reminder in his notebook, then drove to the company headquarters. He carefully read the article Di Ye published in the *Pujiang Securities News* twice in the archives. Feeling sufficiently prepared, he called the Mandarin Oriental Hotel to ask the front desk for Di Ye's room number.

"Mr. Liang, Mr. Di has already given instructions. He said he is not going out today, so you can come to visit at any time."

"When did he give these instructions?"

"Last night."

Liang Botao hung up the phone, opened his notebook, and added the words "god-like foresight" as a note under Tang Renrong's reminder. Then, without further delay, he headed straight for the Macau Suite on the 24th floor of the Mandarin Oriental Hotel.

The Macau Suite was over 100 square meters and had a separate reception room. When Liang Botao saw Di Ye in the reception room, he noticed his dark circles and that he seemed a bit listless. He said apologetically: "Did Mr. Di not rest well last night? I will come back to visit at another time."

"No need, a cup of coffee will do."

Di Ye gestured for Liang Botao to sit down and explained: "I was playing with computers at the Hong Kong Polytechnic University last night and lost track of time. I didn't get back until the middle of the night and only slept for about 4 hours."

Liang Botao thought this was a decent opening topic, struck a pose of being quite interested, and asked a question he already knew the answer to: "Mr. Di Ye is also proficient in computers?"

"I studied computers, so I suppose I know a little bit."

Just as Di Ye and Liang Botao were feigning humility, a prestigious university in Beijing had descended into chaos because the server at the school's computer center had been hacked; whenever someone logged in, a warning window would pop up displaying shocking text such as "Expand the center" and "Save her quickly."