China’s Wanda Stock Crashes, Chairman Detained

China’s Wanda Stock Crashes, Chairman Detained

China’s Wanda Stock Crashes, Chairman Detained

$AMC

  • Wanda’s Hollywood future in question, Beijing exerts pressure

  • Wanda said the claim was “false and malicious.”

Chinese conglomerate Dalian Wanda Group denied rumors that its billionaire chairman Wang Jianlin was detained by authorities and forbidden to leave China. But the damage has been done at home and abroad to shares in its Hong Kong-listed subsidiary, as they dove 10% Monday.

Wanda respond to the turmoil, saying the reports were false and malicious.

“Certain individuals with ulterior motives have recently created and spread various vicious rumors regarding the Chairman of Wanda Group, Mr. Wang Jianlin,” the company said in its statement.

The rumor, circulating in China for some time now, was carried by a Taiwanese blog before being picked up by several more established Chinese tabloids.

The blog claims that Wang was stopped and detained, with his family, while attempting to depart the Chinese city of Tianjian aboard a private jet bound for the UK.

Because of the power and opacity with which the state maintains over private industry in China, investors in prominent firms are always on edge over real or perceived signs of political disfavor.

And Chinese business leaders have gone missing before.

In December 2015, Chinese conglomerate Fosun lost contact with its billionaire chairman Guo Guangcheng, leading to speculation that he had been picked up on corruption charges. Guo later resurfaced with the explanation that he was “assisting” the Chinese authorities with a special investigation.

Wanda, along with Fosun, Anbang Insurance and HNA Group, has been at the center of an escalating government crackdown on corporate debt and capital outflows.

Sources say Chinese banks have been instructed to stop lending to several of Wanda’s overseas acquisitions in the entertainment, real estate and sports sectors.

Wang has not been seen for some months now.

Dalian Wanda Hotel Development, listed in Hong Kong, saw its shares fall as much as 11% Monday, while another subsidiary Dalian Wanda Commercial Properties saw the yield on its USD bonds rise 27 bpts, according to the data.

Wanda’s US entry. AMC Entertainment (NYSE:AMC) is trading at 52 week lows.

Share prices had mostly bounced back following Wanda’s statement, however.

More of Wanda’s statement: “Wanda Group strongly reiterates that all of these rumors are utterly baseless and have ulterior motives behind them. Wanda Group encourages the public not to believe the rumors or spread them further. We have reported the situation to relevant government department and also reported the case to public security authorities. Wanda Group is determined to protect its rights with legal actions and pursue legal actions against the relevant media.”

In July, Chinese President Xi Jinping convened a high-level conference on financial reform, calling for a reversal of the rising tide of corporate indebtedness.

The Big Q among industry watchers is: Has Wang personally has fallen afoul politically, or if his aggressively acquisitive conglomerate has simply been swept up in the broader efforts to clean up China Inc.’s books?

“His detractors are all saying he’s doomed, while his supporters insist none of this really has anything to do with him specifically,” says a veteran Chinese deal-maker. “But the only one who really knows is the man who has his hand on the levers of power, and they never just come out and say.”

Wang has gone out of his way, calling undue attention to the rise of China, and helped revive the theory of the China threat, which Beijing is always combats; arguing that China believes in Harmony.

Symbol Last Trade Date Change Open High Low Volume
NYSE:AMC 12.9 25 August 2017 0.10 12.95 13.25 12.75 1,976,200
HeffX-LTN Analysis for AMC: Overall Short Intermediate Long
Very Bearish (-0.62) Very Bearish (-0.57) Very Bearish (-0.61) Very Bearish (-0.69)

Have a terrific week.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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