Philippine Asian News Today Vol 18 No 18 | Page 30

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PHILIPPINE ASIAN NEWS TODAY September 16 - 30, 2016

BUSINESS NEWS

OHedging the Yuan Depreciation
The Chinese Yuan was
weakening since the start of 2016
and hit a 5-year low just last August due to the global strength
of the US Dollar. During times
of depreciation, hedging against
the currency is a way to Chinese
business to safeguard investments and resources from the
depreciation loss. This comes in
the form of foreign investments in
real estate and other industries.
Foreign investments is also good
for the Chinese economy as it diversifies industries and wealth as
with China’s Go Global initiative.
Since the start of 2016, we’ve
seen acquisition and pledges
from Chinese conglomerates
spread from North America to
Europe.
In Vancouver during the
first quarter of 2016, China’s
Anbang Insurance Group, with
about $ 114 Billion in assets,
bought 66% of four major office
towers in Bentall Centre which
anchor downtown’s Vancouver
Central Business District for an
estimated $ 660 Million ( $ 1
Billion valuation ). The remaining 34% is owned by Great West
Life Insurance. Anbang’s biggest
North America investment was
the acquisition of the famed Waldorf Astoria in New York City for
$ 1.9 Billion. Not surprised if Chinese investors actually acquire

Grouse Mountain, one of Vancouver’s premier tourist attractions, which was just put on sale
in the market a few weeks ago. In
the land of down under, Chinese
investors almost acquired 2.5 %
of Australia’s agricultural land
and 1.3 % of its land mass during the 2nd quarter of this year
with the planned acqui sition of
2 of its biggest cattle properties,
Consolidated Pastoral Company
( CPC ) and S. Kidman & Co.
Last summer, Chinese companies went on a different kind of
shopping spree in the football
world. Football is fastly growing
China especially with the government’s Happiness Plan initiative.
In the Premier League, the Chinese invested in West Bromwich
Albion, Aston Villa, Wolverhampton Wanderers, Birmingham, a
13% minority stake in Manchester
City for $ 527 Million. Outside of
the Premier League, CEFC China Energy Company invested in
60% of Slavia Prague, one of the
oldest soccer clubs in the Czech
Republic, for $ 57 Million and
Dalian Wanda got a 20% minority stake in Athletico Madrid. The
Chinese took advantage of Italy’s
challenging economy by also
buying AC Milan for about $ 826
Million a month ago and ending
Silvio Berlusconi’s 30-year era
with the team . That was after

initial investments in Inter Milan
$ 306 Million and Aston Villa for
$ 87 Million last June. Both Milan
teams are now owned by Chinese
investors. Besides investment
purposes, the story of underdog Leicester FC ( owned by a
Thai Billionaire Vichai Srivaddhanaprabha ) which recently
won the Premier League title
against by super longshot odds
and a Moneyball budget might
have inspired other Billionaires
in Asia. China is now reshaping
European soccer with its massive
resources and like the Europeans
– soon to be a powerhouse in the
sport in a few decades.
With basketball being such
is a phenomenon in China, it is
not surprising that the NBA already had its first Chinese minority owner last June in Lizhang
Jiang invested in 5% of the Minnesota Timberwolves and 5% of
WNBA’s Minnesota Lynx ( both
majority owned by Glen Taylor )
whose star Maya Moore plays for
Shanxi Flame in China during
the winter. The estimated worth
of the Minnesota Timberwolves
is at least $ 1 Billion. Could have
been cool if Liang invested in the
Wolverhampton Wanderers of
the Premier League as well but
the Chinese conglomerate Fosun, which also made headlines
for investing in entertainment co-

By Edgar Sevilla

lossus Cirque du Soleil, acquired
100% of the Wolves from Steve
Morgan a month after the NBA
investment. Not to be left behind, Liang purchased Granada
FC of the Spanish League. Soon
the young nucleus of the Timberwolves like Andrew Wiggins,
Karl Anthony-Towns and slam
dunk champ Zach La Vine will be
treated like rock stars in China
– similar to the unbelievable reception NBA MVP Stephen Curry
got during his just recent visit.
The Los Angeles Lakers even
brought back 7-foot Chinese star
Yin Jianlian back to the NBA this
coming season which is great
marketing move.
Dalian Wanda, owner of
AMC the 2nd largest movie chain
in the US, bought Legendary
Entertainment for $ 3.5 Billion.
They might have failed to acquire 49% Paramount Pictures
from Viacom but Legendary
Entertainment is responsible for
such box-office giants like Jurassic World, Godzilla, Pacific Rim,
Dark Knight, and Steve Jobs.
And as of present, Wanda is in
discussion to acquire Dick Clark
Productions for $ 1 Billion as its
entry to the TV business. This
would bring some of the world’s
most viewed programs like the
Golden Globes, Billboard Music
Awards, Miss America, and the

WWW.PHILIPPINEASIANNEWSTODAY.COM

American Music Awards to the
Chinese audience. After investing
$ 2.6 Billion in AMC in 2012, Dalian Wanda still plans to become
the biggest movie chain in America by acquiring the Carmike
Cinema chain. The company is
also planning to obtain Europe’s
largest movie chain Odeon and
UCI as well. I guess this is not
just about films and intellectual
property, these acquisitions is
also in preparation for Wanda’s
masterplan to build theme parks
in China to rival those of Disney.
The company already plans to
invest $ 3.3 Billion in EuropaCity
by 2024. This mega theme park
project near Paris’ Charles De
Gaulle Airport is Dalian Wanda’s
biggest single project investment
in Europe by far.
All this is not new, Chinese
investors have been hedging
for years from mining claims in
Africa to luxury resort clubs in
Newport Beach but the first 3
quarters of 2016 and the buying
spree of trophy sport teams last
summer seemed pretty extraordinary. With all of these foreign
investments and the strengthening US Dollar, you might have a
good idea in what direction the
Chinese Yuan is going.
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