Adam Roseman, CEO and Co-Founder of FansTang, the largest provider of localized international entertainment content in China, discussed with Phoenix TV some of his ideas on how best to bridge the gap that exists between the entertainment industries in China and the USA.
Roseman believes that the opportunities that present themselves today in China are greater than they have ever been before in history, particularly in the entertainment industry. However, Roseman says, there is a large difference between the reality of the market, and the perception. The last 12 months, especially, have exacerbated the gap between perception and reality, due to the large number of new companies that have entered the marketplace. Companies that are coming into the entertainment industry now, whether on the China side or the US side, are coming into the marketplace a bit naïve. As Roseman explains, “It is easier to see the opportunities than to properly understand the challenges.”
Roseman continued: “China and the US are tremendous economic powers, but they both operate very differently from a cultural perspective. And that cultural difference in particular is amplified when you are talking about the entertainment sector. In Hollywood you have a lot of very strong personalities; a lot of arrogant people; a lot of people who could be described by the expression, ‘Their way or the highway.’ But in China things are just done differently. In China, in the entertainment sector as well, there are a lot of very powerful people. They have been very successful and are now entering the entertainment industry. These people are not used to being told ‘No.’ Getting these two parties, who come from such different backgrounds, to work together in a seamless fashion, is just challenging.”
Roseman says that bridging the gap between the two entertainment super powers is just a question of experience and understanding. Over time, he says, the market will grow dramatically. However, because of the large number of new entrants into the entertainment market, the perception of growth will outpace the reality.
Asian real estate investors are venturing beyond regional markets to OECD countries and other areas in the West, according to a recent study by Colliers International.
Outbound real estate investment from Asia has climbed from $1 billion in the early 2000’s to more than $30 billion in 2013. This is a result of a surge in global liquidity, as well as several other “pull” and “push” factors, according to CEO, Asia at Colliers International Piers Brunner.
Pull factors include the higher yields available in foreign markets, as well as strong economic growth potential and first world country real estate environments. Meanwhile, governments in Mainland China, Hong Kong and Singapore are pushing investors in an effort to slow local real estate markets by loosening overseas investment restrictions.
According to John Marasco, Colliers International’s Managing Director of Capital Markets and Investment Services in Australia, the Chinese investors are contributing greatly to the Australian real estate market.
“Chinese buyers alone are currently spending around $5.9 billion a year on Australian property (both residential and commercial),” he said. “The strong performance of Australia’s property markets suggest this demand will continue to grow across a range of assets.”
Director of Capital Markets and Investment Services, Asia, Terence Tang added: “We believe the emerging trend will see more outbound investors taking on additional risks in non-traditional property sectors, such as hotels, and to commit to value-adding schemes, including conversion and development opportunities, in the secondary locations of gateway cities, where prices are more attractive than in traditional core locations.”
Whether because of or in spite of the global marketplace’s volatility, there is no question that investors are flocking to all things Chinese. Oasis Management Hong Kong, along with a large portion of investors, are busy investing in Asia and trading on the domestic capital markets. But there has been a recent change in the direction Asian investments have been heading.
Opportunities have been shifting for both global fund managers as well as Chinese investors. During the past several decades the emphasis for foreign investors and Chinese regulators has been mostly inbound in type. A sea change is on the horizon as the number of domestic Chinese investors grows and the quick accumulation of large amounts of RMB capital is accrued simultaneously with insufficient global liquidity.
The coming together of the above factors has led to an increased interest in outbound investing opportunities.
A number of major global investment firms are choosing emerging markets in an effort to recover from the latest financial slump. Mirae Asset Global, a firm with $58 billion under management, explained that emerging economies are the hub of global output. The leading market is China, they added.
“We are positive on equities for 2013, although not outrightly bullish,” Mirae analysts wrote in a client report last week. “We believe that the earnings downgrade cycle has ended… and that economic recovery will be slower than in previous cycles as the economies of China and India work to correct their imbalances and are restricted in their ability to pump prime growth.”
The report added, “We are identifying pockets of overvaluation in consumer sectors, and now favor early-cycle consumer discretionary and financials over staples. Industrials and health care stand out as combining structural growth, government support and reasonable valuation.”
According to an announcement by the Greek agency for privatization HRADF there are now eight potential investors, including private equity funds and a large Chinese conglomerate, showing interest in purchasing a large stake in the Greek gambling monopoly OPAP.
The Chinese concern showing interest in the purchase of OPAP, which needed to meet a November 9 deadline, was a subsidiary of Fosun International. Fosun is one of the largest of China’s business groups whose key shareholder is the Chinese billionaire Guo Guangchang.
OPAP is one of the largest-listed gambling companies in all of Europe. At the moment Greece is offering about one third of OPAP, which is almost its entire stake in the company. OPAP’s total market capitalization is valued at 1.5 billion euros ($1.9 billion) on the Athens Stock Exchange.
Others interested in bidding on the Athens stake in OPAP are several private equity firms including BC Partners and TPG Capital LP. Playtech, the giant Estonia-headquartered online gaming software provider is partnering with the German gaming equipment maker Gauselmann AG to possibly add their own bid.
OPAP is the major monopoly which the Greek privatization program is dealing with in 2013. The privatization program is part of the plan for Greece to raise 2.6 billion Euros to help make its way out of its severe debt and is part of the international bailout plan.