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CSCI Morning News Circular - 20180315

1. Macro News

• Jan-Feb industrial output rises, investment quickens. China's industrial output posted steady growth in the first two months of this year, up by 7.2 percent year-on-year, 1 percentage point higher than in December, official data showed Wednesday.  [China Daily]   
• China's non-financial ODI maintains strong growth. China's non-financial outbound direct investment (ODI) maintained double-digit growth in the first two months of the year, official data showed Wednesday. Domestic investors made $16.82 billion of non-financial ODI in 1,429 overseas enterprises in 135 countries and regions for January-February, the Ministry of Commerce said.  [China Daily]
• UK forecasts modest 1.5pc growth. The UK has revised its economic growth forecast for 2018. The forecast for growth this year was revised upwards to 1.5 percent from 1.4 percent forecast in the November budget. But growth is forecast to slow to 1.3 percent in 2019.  [Standard] 

1. Industry News

• Chinese steel makers post fat profits amid capacity cuts. China's listed iron and steel producers have posted strong profits for 2017 as the country's production capacity cuts reduced outdated supply and led to rising steel prices, which showed the positive outcomes for the steel sector from China's capacity cut efforts.  [China Daily] 
• Bourses to curb listing violations. Bourses in Shanghai and Shenzhen released drafts on Friday of the delisting procedures of public companies that have committed major legal violations, showing the regulator's resolution to strengthen the administrative responsibility of stock exchanges.  [China Daily]      
• Banking supervision to intensify. The government will continue to tighten supervision on the banking sector with regulations that could extend into credit beyond the reach of supervisors, the head of a provincial office of China Banking Regulatory Commission said.  [China Daily]    
• Corporate News
• Croatian firm Rimac sets up electric car JV in China. Croatian company Rimac Automobili and China-based Camel Group are building a factory for electric motors and batteries in China, Croatian daily Poslovni Dnevnik reported. The total investment is worth $158.2mn.  [China Daily]    
• Xiaomi looks to India amid overseas expansion drive. Chinese smartphone vendor Xiaomi Corp said it will launch at least six new smartphones and open 100 exclusive stores in India, the world's fastest-growing major smartphone market, this year.  [China Daily]    
• Battery giant buys stake in lithium firm. Contemporary Amperex Technology Co Ltd, China's leading automotive battery maker, has purchased a more than 90 percent stake in a lithium company based in Canada, in a move to secure supplies of the key raw material.  [China Daily] 
• Alibaba-led group plans buyout of iKang Healthcare. An investment consortium backed by Alibaba Group Holding Ltd founder Jack Ma has officially resumed its privatization bid for China's iKang Healthcare Group Inc, after two years of stalemate following a takeover war.  [China Daily] 
• Sogou needs more hospitals for its CEO's 'digital family doctor' proposal. Search engine Sogou plans to cooperate with more hospitals as its next step to perfect its medical information platform, the Sogou Doctors, Wang Xiaochuan, CEO of Sogou, told chinadaily.com.cn.  [China Daily]  
• Regulator wallops railcar owner with a US$870mn on fine for manipulating stock prices. Xiamen Beibadao Group, China’s largest private owner of cargo railcars, was penalised for being complicit in manipulating the stock prices of Zhangjiagang Rural Commercial Bank, Jiangyin Rural Commercial Bank, and Guangzhou Hoshion Aluminium.  [SCMP] 
• IHG buys 51pc stake in Regent Hotels & Resorts for US$39mn. InterContinental Hotels Group announced on Wednesday that it will buy a 51 per cent stake in Regent Hotels and Resorts for US$39 million in cash, a move that would accelerate its expansion in the luxury hotel segment.  [SCMP] 
• HKMC says its mortgage business volume rose 30pc in 2017. .The Hong Kong Mortgage Corporation reported its mortgage business volume rose 30 per cent last year to HK$32.3 billion, indicating that homebuyers were relying on the government-owned body for financial support as local property prices soar into the stratosphere.   [SCMP] 
• Tencent disables comments section for new official WeChat accounts at request of Beijing. WeChat, China’s biggest social network and messaging app with more than 1 billion users, disabled the comments section of newly registered official accounts on Tuesday to comply with a Chinese government request.  [SCMP] 
• Cathay forks out HK$224m for layoffs, staff costs rise to HK$19.9bn. Redundancy costs at Cathay Pacific, which has undertaken a three-year turnaround plan, have added up to HK$224 million and they have been recognized in 2017 as staff expenses, Chairman John Slosar said on Wednesday.  [The Standard]  
• Passenger revenue, yield shrink at Cathay Pacific. Passenger revenue at Cathay Pacific Airways, which is 45 percent owned by British conglomerate Swire, fell by 0.8 percent to HK$66.40 billion, in the year to December 31, 2017. As the carrier launched more routes and increased flight frequencies, capacity increased by 2.8 percent.  [The Standard]  
• China Life Insurance Company reported premium income of 154.6 billion yuan. China Life Insurance Company (2628) reported that the accumulated premium income from January 1 to February 28 was about 154.6 billion yuan.  [The Standard]
• HK Electric profit hit by mild weather. HK Electric Investments (2638) posted a seven percent decrease in net profit from HK$3.590bn in 2016 to HK$3.341bn last year. Unit sales of electricity decreased by 1.6 percent mainly due to much milder weather in the first half of 2017 and public awareness of energy conservation, the company said.  [The Standard] 
• Broadcom Drops Qualcomm Bid After Trump Opposition on Security. Broadcom Ltd. formally abandoned its attempt to acquire rival chipmaker Qualcomm Inc. after U.S. President Donald Trump blocked the deal citing national security risks.  [Bloomberg] 
• Cathay Nears End of Tunnel With Surprise Second-Half Profit. Cathay Pacific Airways Ltd. is finally seeing some respite from its earnings woes.Strong cargo demand, travel pickup help narrow full-year loss. The airline also recorded smaller loss from fuel-hedging contracts.  [Bloomberg] 
• China Wealth Fund Sells Blackstone Stake Held Since 2007. China Investment Corp. has sold its stake in Blackstone Group LP, ending an investment stretching back to before the U.S. firm’s 2007 initial public offering. Blackstone says CIC didn’t hold shares as of Feb. 22.  [Bloomberg]