THE START OF THE GREAT CHINA PULLBACK? MARKET JITTERS SPREAD AFTER BEIJING’S CURBS ON DALIAN WANDA

SHANGHAI – China’s curbs on property giant Dalian Wanda Group’s overseas deals are spreading a chill at home and abroad, raising fears that a campaign to root out risky overseas investments could draw in rival Chinese conglomerates and even Hollywood studios.

Giant Chinese retailer Suning Commerce Group Co Ltd, the owner of Italian soccer club Inter Milan, saw its shares tumble yesterday after China’s state broadcaster cited the firm’s 270 million-euro deal for the club last year on a show about “irrational” investment overseas. Wanda-owned cinema chain AMC Entertainment Holdings Inc and Hollywood studio Legendary Entertainment said late on Tuesday their businesses were insulated from curbs imposed by Chinese regulators on overseas spending by their parent. AMC’s stock had slid on Monday on fears over the crackdown.

The market jitters come amid a broader drive by Beijing to restrict Chinese conglomerates’ moving funds abroad. China is also cracking down on risky lending ahead of a key Communist Party congress in the second half of this year.

Wanda, led by one of China’s richest men, Wang Jianlin, is one of several acquisitive Chinese firms that have expanded aggressively overseas into areas beyond their original business.
Chinese banks had been told to stop providing funding for several of Wanda’s overseas acquisitions as Beijing looked to curb the conglomerate’s offshore buying spree, sources familiar with the matter said on Monday.

AMC, bought by Wanda for US$2.6bil in 2012, said, however, that four deals for cinema chains completed between 2015 and earlier this year were fully paid for by its own funds and loans from US-based banks.

“At no time was Wanda ever a source of funding for any of these acquisitions or individual theatre purchases,” AMC said in a statement on Tuesday. The cinema chain added it had “never received committed financing from any bank headquartered in mainland China for any purpose” and that Wanda did not actively participate in the day-to-day running of AMC beyond three seats on its board. AMC shares rose 2% on Tuesday after the statement. They had plunged 10% on Monday on news of the curbs.

— Reuters

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✍ Sumber Pautan : ☕ Malaysia Chronicle

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