Chinese billionaire Wang Jianlin’s (王健林) Dalian Wanda Group Co (萬達集團) was yesterday in focus as the shares and bonds of its units plunged.
Wanda Film Holding Co (萬達電影) shares tumbled as much as 10 percent in Shenzhen, China, its biggest loss since January last year, before its shares were suspended from trading.
Wanda Properties International Co’s 2024 notes plunged as much as US$0.107 to US$1.01 in morning trading in Hong Kong, the biggest drop on record, data compiled by Bloomberg showed.
The rout might have been caused by speculation that banks were issuing notices that they will sell Wanda bonds, the group said in a statement, adding that the rumor is false.
Both companies are subsidiaries of Wanda Group, the property-to-entertainment conglomerate that has stood out in recent years for making acquisitions in Hollywood, such as the purchase of Legendary Entertainment.
Wang is China’s second-richest man with a fortune of US$31.1 billion, according to the Bloomberg Billionaires Index.
There is speculation about political risks surrounding the Wanda Group, Core-Pacific Yamaichi HK (京華山一) head of research Castor Pang (彭偉新) said.
“The most important factor of doing business in China is the company’s political stance. It is important for the company to ‘stand at the right side.’ Political risks are the factor that is most difficult to evaluate in China. Even if it is just a rumor, investors will choose to sell off first,” Pang added.
Wanda last year became the first Chinese firm to own a major Hollywood film production company with the US$3.5 billion purchase of Godzilla maker Legendary Entertainment.
Wanda is also the world’s biggest operator of movie theaters.
China’s blue chips yesterday extended gains to hit a fresh 18-month high on excitement over MSCI Inc’s decision to include Chinese shares in a key index, but most of the gains were erased in late trade as investors took profits and as the weakness in small-cap stocks dampened sentiment.
The blue-chip CSI 300 rose 0.1 percent to 3,590.34 points, while the Shanghai Composite Index lost 0.3 percent to 3,147.45 points.
However, interest in blue chips sapped demand for small caps, which has already waned sharply. Start-up board ChiNext dropped 1.4 percent.
Investors continued to pile into stocks that will potentially benefit from inclusion in the MSCI Emerging Markets Index.
The US index provider on Tuesday said it would add 222 China-listed stocks to its Emerging Markets Index, tracked by about US$1.6 trillion, with the inclusion process starting in June next year.
Hong Kong-based Bocom International Holdings Co (交銀國際控股) chief China strategist Hao Hong (洪灝) said that the inclusion “bodes well for large-cap blue chips” and enhances investor preference for these stocks amid a slowing Chinese economy.
Additional reporting by Reuters
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