Casinos May Be Beautiful Game for Atletico’s Wang: Opening Line

When you’ve got the yacht, the private jet and the Van Gogh, there’s only one choice to signal you’ve joined the global super-elite: that vast sinkhole of cash known as a European soccer club.

Our first thought on reading that Chinese billionaire Wang Jianlin is buying into Atletico Madrid was the advice we received when planning our first Swiss holiday: “Take a lot of money.”

European football clubs are such spendthrifts that the governing body, UEFA, had to bring in rules to limit the amount they are allowed to lose every year. (Profits? What are they?) Football is where billionaires go to spend their fortunes, not enhance them.

On second glance, Wang looks a little cannier. For one thing, he isn’t buying the whole club -- only a 20 percent stake, so won’t be on the hook (we presume) for any big spending plans inspired by the arrival of a new sugar-daddy. For another, Atletico Madrid has achieved success on a budget, becoming Spanish champion last season while spending a fraction of bigger-name rivals Real Madrid and Barcelona.

Even better, there may be a business side-angle for Wang. The chairman and founder of Dalian Wanda Group said he’d met Spanish Prime Minister Mariano Rajoy to discuss a 3 billion euro ($3.4 billion) “megadeal.”

Atletico has properties outside Madrid that it was hoping to develop as part of a casino and leisure complex, according to the Financial Times. U.S. billionaire Sheldon Adelson abandoned the $30 billion project in 2013 after failing to gain assurances from Spanish officials on tax rates and other conditions.

Then again, maybe Wang’s heart will end up ruling his head. The billionaire, who has a net worth of $24.9 billion according to the Bloomberg Billionaires Index, said he’s considering buying more soccer clubs and has been linked in the past with a bid for English Premier League outfit Southampton.

If he arrives in England, Wang can look forward to rubbing shoulders with Sheikh Mansour, who’s invested more than 1 billion pounds in Manchester City (2014 loss: 22.9 million pounds) and Chelsea owner Roman Abramovich (investment 2 billion pounds; nine losses in the past 11 years.)

Make sure that yacht has a big safe.

***

Economic indicators in Asia today include Taiwan December unemployment data at 8:30 a.m. Hong Kong time, Hong Kong inflation at 4:30 p.m, and Malaysia foreign-exchange reserves. New Zealand has consumer confidence data due at 8 a.m.; manufacturing expanded at a faster pace in December while job advertisements rose for the first time in three months, data showed a short while ago.

The Bank of Japan’s monthly economic report for January is due at 2 p.m. in Tokyo.

Companies reporting earnings include Hyundai Motor in South Korea, Singapore’s Keppel Corp., Dongfeng Motor Group of China and Cairn India. In the U.S. later, we have results from companies including Southwest Airlines, Verizon Communications and Starbucks.

***

- The World Economic Forum continues in Davos. Bloomberg Television has coverage throughout. Full schedule here. - Premier Li Keqiang told Davos not to worry about China’s slowdown. Meanwhile the central bank rolled over a 269.5 billion yuan lending facility and added 50 billion yuan in loans to ease liquidity ahead of the Chinese New Year holidays. - Draghi proposes 1.1 trillion euro quantitative easing plan - Canada unexpectedly cuts interest rates - Malaysia’s catholics can’t use ‘Allah,’ top court rules - China considers easing ban on foreign investment in Internet - Samsung will use its own processors in the next version of the Galaxy S phone, dropping Qualcomm - New York expands Barclays ‘dark pool’ complaint - Uber said to Raise $1.6 billion for expansion - Wife of Japanese hostage received ransom email from Islamic State in December - Widodo’s anti-graft halo is slipping - Toyota set to lose sales crown to VW - U.S.-Cuba talks focus on migration policy - Tycoons take note of Li Ka-shing’s property move - Billionaire Jeff Greene says U.S. faces job crisis - Sanctions, what sanctions? Russians party at Davos - China cracks down on pregnant women using Hong Kong for fetus sex tests - Shanghai fires four officials over New Year stampede - And how’s the air where you are? - Barefoot dasher jailed for trading on releases - Former champions Nadal, Sharapova pushed to the limit by qualifiers before advancing at Australian Open

***

Believe it or not, there’s a guy they call “Buzz” who works at Goldman Sachs and it’s not in the mailroom. Buzz Gregory is more or less telling all the muppets that it’s time to calm the heck down about the stock market, as Callie Bost reports, and you gotta admit it’s hard not to listen to a guy named Buzz when he tells you to calm down. Buzz says the Chicago Board Options Exchange Volatility Index, known as the VIX unless you’re a headline writer then it’s always known as the “FEAR GAUGE,” will average 16 in 2015, about 3 points below its last closing level of 18.85. Good thing for this strategist, because otherwise everyone might start calling him Buzz Kill.

While the Goldman-wary Internet commenters of the world may take Buzz’s remarks as a code word for “the end of the world is nigh and Goldman’s bought a put on the apocalypse,” the U.S. market took it all in stride. The Standard & Poor’s 500 Index closed up 0.5 percent at 2,032.12. Energy companies led the way, gaining 1.8 percent as a group. No pressure or anything, Mario.

***

Someone flicked the “ON” switch again. The Shanghai Composite Index closed 4.7 percent higher after rising 1.8 percent on Tuesday, bringing the two-day gain to about 6.6 percent, the most in almost five years.

After being spooked by tougher margin lending restrictions on brokerages, the index has regained almost all the 7.7 percent it lost in Monday’s rout. So all’s well again -- until it isn’t.

The bull run is “likely to proceed at a slower pace from here on out,” Morgan Stanley strategists Jonathan Garner and Laura Wang wrote in a report. That’s what we call optimism. Our call is for the market to be up 50 percent in the next three months. Or down 50 percent. We’re just not sure which.

***

History may not repeat, though it certainly rhymes.

Kaisa Group would be the first Chinese developer to default on a dollar bond if it fails to make its coupon payment within a 30-day grace period.

That set us thinking about the first Chinese company to default on an international bond since the revolution: Guangdong International Trust and Investment Corp., which collapsed back in the mists of time during the Asian crisis.

What both companies share is that they were (or, in Kaisa’s case, may be) brought down by an administrative decision.

Gitic may have been a financial basket case, but foreign creditors took it as a state-backed company and hoped for a bailout. They were disappointed: Guangdong authorities pushed it into bankruptcy in early 1999. With a proliferation of “itics” having borrowed abroad in the go-go years of the early to mid-1990s, the goverment used the case to send a message to foreign investors: don’t rely on implicit guarantees. Do your due diligence. Lend to companies that can afford to repay.

By contrast, privately owned Kaisa has been doing just fine, to judge by its financials: profitable, growing and solvent. Its distress stems from being embroiled in an investigation by the Beijing-based anti-corruption agency.

The decision to push Gitic into bankruptcy was made by Wang Qishan, sent in by then-Premier Zhu Rongji to fix the province’s financial mess. Wang’s job now: running President Xi Jinping’s anti-corruption campaign.

Does Wang have another message for foreign investors?

***

Home-town hero Nick Kyrgios delighted the Melbourne crowd by beating 23rd seed Ivo Karlovic in four sets yesterday to reach the third round of the Australian Open. His post-match interview, not so much. The 19-year-old, who knocked Rafael Nadal out of Wimbledon last year, drew some flack on social media for replies that were perceived as cocky and arrogant. Asked about his comeback to win the fourth set and avoid going into a fifth, Kyrgios’s reply was “Well, yeah that’s usually what happens when you lose a fourth set, you go into a fifth one.”

Bit early for that. Maybe wait until you have the first grand slam under the belt.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE