章節 355: Asian Financial Crisis
The month of June passed by like lightning, and in July, the 1997 Asian Financial Crisis that has been awaited by Shin for quite some time finally occurred.
And as Shin expected, it started with Thailand, facing mounting foreign debt and currency pressures, abandoned its fixed exchange rate peg with the US dollar.
The Thai baht rapidly depreciated, triggering a domino effect across the region.
Investors, fearing devaluation in other regional currencies, began withdrawing capital from Asian markets, further exacerbating the situation.
Thailand's crisis quickly spread to Indonesia, Malaysia, the Philippines, South Korea, and other regional economies.
Shin could have obviously used the financial power of his company to short currencies such as the Thai baht, making significant profits. However, he was against such an idea. Not only would he not be helping the country by doing that, but he would also be causing more harm.
And, the reputation of KiShin is as important as the profits. Shin wasn't really desperate for money, as he could gain billions in the future. Although he would still profit from the financial crisis by leveraging his future knowledge and acquiring profitable staples unaffected by the crisis, most of the profits acquired would be directed to the KiShin Foundation. This would create jobs in those countries through KiShin subsidiaries, ultimately benefiting KiShin's overall business established in those nations.
KiShin's significant investments in industries that could weather the crisis, such as healthcare and consumer staples, proved to be the right choice, remaining stable despite the financial downturn.
Meanwhile, in South Korea, major companies like SamStar and Hyun-Motors were facing difficulties as the days of the Asian Financial Crisis continued to pass.
The major companies owned by the so-called chaebols relied heavily on foreign loans, fueling rapid economic growth but leaving them vulnerable to currency fluctuations.
The fixed exchange rate, pegging the Korean won to the US dollar, masked underlying weaknesses and inflated asset prices.
The weak financial system of South Korea, characterized by insufficient regulation and risky lending practices, made banks susceptible to the crisis.
The people of South Korea were growing restless as the Asian Financial Crisis significantly impacted the country, broadcasted on TV news channels.
The won plummeted, making foreign debts significantly more expensive and triggering widespread insolvency.
Financial institutions burdened by bad loans went bankrupt, further crippling the economy, which seemed to be entering a recession.
---
Shin merely observed, discerning from reports of South Korean conglomerates currently grappling with the onset of the Asian financial crisis.
Although many conglomerates were still struggling to survive, what they didn't know was that the financial crisis would affect South Korea so profoundly that it would last at least two years. Not only that, the long-term social and economic repercussions lingered for several years, with full recovery estimated to have taken around a decade.
Shin remained patient. After the start of the Asian financial crisis, he didn't immediately acquire stocks of the South Korean conglomerates.
He would have to wait, perhaps for months, until those companies reached their lowest point.
Shin observed the situation with the second motor company in South Korea, Daewoo Motors. He anticipated the company's impending collapse, considering the possibility for KiShin to acquire it and gradually enter the motor industry.
Meanwhile, SamStar appeared to be faring well. However, Shin patiently waited, wondering if the proud company or chaebols would seek assistance from him. Despite SamStar chaebols expressing a desire to sever the partnership with KiShin, they had not yet cut ties, indicating that KiShin was still partnered with SamStar.
Shin planned to acquire stocks of SamStar, Hyun-Motors, and Lucky Gold around November when they offered lower stock prices.
The later years (1998-1999) might present opportunities for even more affordable prices due to prolonged economic hardship. However, earlier purchases in 1997 could showcase KiShin's foresight and risk tolerance.
And with KiShin having a partnership with SamStar, Shin knew it was advantageous to acquire a significant amount of stocks.
---
In SamStar Headquarters, in the chairman's office.
The current Chairman of the company, Han Jin-Sang, was dealing with a headache. He had recently inherited the position from his father, Han Woon-Sook, thinking he could relax and let his talented employees handle things. However, he didn't expect the sudden onset of the financial crisis.
Feeling anxious, he observed the stock prices of SamStar Group fall, noticing the same downturn pattern in other South Korean companies.
"Damn it," Han Jin-Sang couldn't help but slam his hand on the table, gripping it tightly. The secretary on the side remained silent.
"Damn it, damn it! How can we continue with the plan when this damn crisis is upon us!?" Han Jin-Sang muttered, his eyes sharp with anger.
The company had just completed a prototype of the research for the company's mobile phone, thanks to KiShin's innovative ideas and some ingenious technological research. Han Jin-Sang had been planning a scheme to effectively terminate the partnership with KiShin while retaining most of the patented technologies on the completed mobile phone. However, before the plan could even begin, the financial crisis hit his country and company hard.
Han Jin-Sang, with his limited knowledge in economics and finance, initially believed that Japan should be struggling as much as South Korea. However, he was disappointed to discover that Japan wasn't as affected as their country.
This indicated that KiShin was still faring very well. In fact, there were even reports that KiShin was helping affected countries in Southeast Asia by providing jobs and assisting their economies through acquiring materials at a cheap price in those nations. The fact that a two-year-old small KiShin subsidiary, KiShin Farm, was selling agricultural products and staples at affordable prices in those countries seemed to indicate that KiShin was profiting from the situation while maintaining a positive image.
Right now, Han Jin-Sang obviously couldn't deal with the pressure and was contemplating contacting KiShin for assistance. He muttered, "Investments... Their investment will definitely help us in this situation..."
Unbeknownst to Han Jin-Sang, the secretary near him was listening carefully. The secretary smiled faintly as he adjusted his glasses. The secretary was, in fact, one of the spy of KiShin.
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