Chapter 107

On December 16, a momentous event reverberated through the global capital market: the Federal Reserve, after nearly a decade, announced a 25-basis-point increase in the federal funds rate, bringing it to a range of 0.25% to 0.5%. The anticipation of this interest rate hike had been on the financial horizon, and Tiansheng Capital, guided by Lu Ming's foresight, had efficiently managed a 40 billion US dollars leveraged funds loan for the central mother, aligning with the expected market move.

The Administration of Foreign Exchange played a crucial role in facilitating this operation. Not only did they grant the necessary approvals, but they also provided cover for Tiansheng Capital, a kind of strategic support that implied a tacit acknowledgment of the importance of this move in the complex dance of international finance.

As a result, 40 billion US dollars swiftly found its way offshore, leaving Tiansheng Capital with a significant liquidity pool of 50 billion US dollars. This financial arsenal was strategically poised, awaiting the right moment for deployment.

Fast forward to Monday, December 21st, Lu Ming, usually more focused on macroeconomic trends and strategy, found himself presiding over a morning meeting that included major fund management teams. In an unexpected twist, Lu Ming, despite his role being more overarching, suggested that all fund varieties under management should initiate a reduction in positions. This was an uncommon intervention, especially considering that fund managers traditionally wield autonomy in their decision-making processes.

Li Mingyang, one of the fund managers, couldn't help but question this decision. Was Lu Ming signaling a lack of optimism about the market outlook? Lu Ming clarified his stance, asserting that he was, in fact, optimistic about the economic transformation in China. However, his caution stemmed from the recognition of potential risks in the upcoming spring. In an astute move, Lu Ming advised his team to sidestep the spotlight, pull back positions, and re-enter the market strategically post a presumed downturn.

Qi Wei, sensing an opportunity, proposed shorting stock index futures. Yet, Lu Ming displayed a decisiveness born of experience, immediately dismissing the idea. He emphasized the importance of restraint, sending a clear message about avoiding high-risk activities even in the face of lucrative possibilities.

Post the morning meeting, Lu Ming's influence manifested as fund managers across the company aligned with his suggestion, initiating a reduction in positions to mitigate potential risks in the market. A clever move considering this aligned with the regular position adjustment month, giving Tiansheng Capital a strategic edge.

Passive index funds, part of the managed funds, faced restrictions due to predefined rules. However, Lu Ming's strategic oversight ensured a 15% reduction in their positions, acting as a safeguard against potential market downturns.

As the day unfolded, the market, displaying its characteristic volatility, opened lower but eventually closed at 3642.47 points. Notably, 72 stocks hit their daily limit in the two cities, indicating a mix of optimism and uncertainty.

Later in the day, the net worth of major funds was updated. Tiansheng Value Growth Mixed Fund secured the 15th position in the daily fund growth list, reflecting a cautious yet successful approach. The liquor concept sector, enjoying a 5.16% rise, showcased the impact of the 'Mao Wulu' trio – prominent liquor companies that witnessed substantial gains.

The morning meeting and subsequent market performance revealed Lu Ming's nuanced approach. His optimism about the economic transformation in China coexisted with a keen awareness of the uncertainties in both the global and domestic markets. The decision to reduce positions wasn't just a precautionary move; it was a strategic play to navigate potential market fluctuations and set the stage for future gains. In this intricate dance of financial strategy, Lu Ming positioned Tiansheng Capital for success amidst the complex interplay of global economic forces.