Chapter Seventy-Five: Storms in the Stock Market

The next day, the brothers Cheng Yuan and Cheng Hao were surprised to see that both Lu Kun and Liu Shixun had changed to new hairstyles. Nevertheless, they didn’t comment on it. The fresh, neat styles were obviously ill-suited for their line of work.

After having breakfast together in the small inn's modest canteen, they prepared to head out.

“Kun, where are we going today?” Liu Shixun chattered on as usual, while the Cheng brothers remained silent, diligently carrying out the personal security duties that Shi Tou had assigned.

“We’re going to take a look at the securities exchange,” Lu Kun replied, his eyes narrowing slightly before he spoke in a light, casual tone.

“Huh? What’s a securities exchange?” Liu Shixun scratched his head, looking thoroughly puzzled.

“You’ll know when we get there. Don’t ask so many questions,” Lu Kun said, striding ahead without a backward glance.

...

1990 was a year of great transformation for Shenzhen. That year, the city surged forward from the background, rising once more with renewed vigor. This time, however, the moves were bold but kept low-profile, with the focus placed squarely on the economic sphere, carefully avoiding political minefields, and always adopting a humble stance to win political and moral support from the central ministries, the provincial party committee of Guangdong, and other provinces and cities.

By the second half of 1990, the securities market in Shenzhen had reached near-madness, with investors scrambling to buy stocks.

In fact, as early as 1988, the securities company of the Shenzhen Special Economic Zone had already been established, and over-the-counter stock trading was gradually becoming a reality. In 1988, the zone had attempted to restructure some enterprises into joint-stock companies, including the now famously loved and hated Shenzhen Development Bank—commonly called "Shenfa" by countless investors.

Back then, only a few dared to be the first to try, and many approached with skepticism. When Shenfa issued new shares, they often met with a cold reception.

But by this year—1990—people realized that buying stocks not only meant dividends but also the chance to profit from trading! Shenfa’s stocks offered high dividend yields, plus bonus and rights issues, and with stock prices continuously rising, the returns were considerable while investment risk seemed to approach zero.

The Shenzhen Stock Exchange was set to open on December 1, and Lu Kun was here to seize the opportunity with this stock demon called Shenfa.

Lu Kun remembered clearly that on the ninth day after the Shenzhen Stock Exchange opened, Shenfa’s stock price soared from around fifteen or sixteen yuan to 79.95 yuan.

Many investors who held original shares in Shenfa found themselves bewildered, having become wealthy overnight. On the black market, Shenfa’s price was even higher than at the counters, doubling from 16 yuan on the exchange to 120 yuan.

“Kun, there are so many people here!” Liu Shixun swallowed nervously as he looked at the long line and spoke with difficulty.

The Shenzhen Special Economic Zone Securities Company only issued 200 numbers a day—no wonder there were crowds, as many arrived at dawn hoping to secure a chance to trade.

Lu Kun had no intention of queuing.

Scalpers were everywhere.

They had only been standing outside the line for a short while when someone approached, offering numbers for sale.

“Gentlemen, do you need a number?” the man said, grinning widely and revealing yellowed teeth.

Liu Shixun and the Cheng brothers wisely kept silent, turning their eyes to Lu Kun.

“How many numbers do you have? What’s your asking price?” Lu Kun asked directly.

“I’ve got number 18—if you want it, it’s fifty-five. I also have number 26; that’ll be forty-five, and number 186, you can take it for twenty,” the man replied, evidently recognizing Lu Kun as the leader.

Before Lu Kun could reply, Liu Shixun blurted out, “That’s daylight robbery!”

Even Liu Shixun, who rarely cared about money, knew that selling a number for dozens of yuan was an enormous profit.

“My friend, that’s not a fair way to put it—the math isn’t that simple,” the man said, eyes narrowing but his smile undimmed.

Lu Kun knew it wasn’t simply about arriving early to get a number. Otherwise, there wouldn’t be such a thriving black market, with stock stalls everywhere—at stations, on streets, in markets, at docks...

Besides, most of the money this man made probably went to those higher up, with a share trickling down to the staff at the securities company.

“I’ll take number 18. How about fifty?” Lu Kun offered generously.

“Deal! You’re straightforward—a Guangdong accent, right? Folks from our province and your Angui are like brothers. Fifty it is! I wish you endless luck and fortune!” the man said delightedly, showering Lu Kun with blessings as the deal closed.

After the man left, Liu Shixun stuck out his tongue. “Kun, you’re really buying something that expensive?”

“You don’t understand. This is your ticket in. If you don’t buy from the securities company, you’ll pay even more out on the black market!” Lu Kun explained.

“Forget it. I really don’t get you. You’ll haggle endlessly over a two- or three-yuan haircut, but now you spend dozens on a number without blinking,” Liu Shixun shook his head, full of confusion.

...

Lu Kun ignored Liu Shixun’s complaints.

...

“Which stock do you want?” the securities company clerk asked indifferently.

“Shenfa!” Lu Kun replied without hesitation.

“Take this form, read it carefully, fill it out over there, and then pay at window three,” the clerk said, waving him off.

...

Lu Kun bought up more than 200,000 shares of Shenfa across three different securities companies, investing a total of over 2.5 million yuan.

If all went according to plan, he would make a hefty profit in just over a month.

Liu Shixun and the Cheng brothers spent the whole day with Lu Kun, finally completing the task; all were left completely exhausted.

Lu Kun was also interested in Vanke, but funds were running tight. For Huakun Supermarket to quickly dominate Fengyang’s retail market, several branches would need to open downtown, creating significant financial pressure.

Right now, Huakun Supermarket was still in its startup phase, with Lu Kun having sole authority and able to mobilize large sums with ease. Once Huakun entered its mature phase, it would become much harder for Lu Kun to move out large sums of money at will.