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CSCI Morning News Circular - 20180323

1. Macro News

• China’s Central Bank Raises Borrowing Costs After Fed Rate Hike. China’s central bank increased the cost of short-term loans to commercial lenders, tightening policy in step with the U.S. Federal Reserve. The People’s Bank of China raised the interest rates it charges on reverse-repurchase agreements by five basis points, the central bank said in a statement.  [Bloomberg]   
• US Fed Forecasts 3 Rate Rises This Yr. The US Federal Reserve announced for the interest rate hike by 0.25% and the US Fed Funds Target Rate was raised to a range of 1.5% to 1.75%, in concordance with consensus. The Fed forecast to have three rate increases in total for this year and next year respectively.  [Bloomberg]   
• Australia Full-Time Jobs Surge; Unemployment Rate Edges Higher. Australian full-time jobs surged in February, while unemployment edged higher as more people sought work, suggesting the central bank is likely to keep interest rates unchanged.  [Bloomberg]       

1. Industry News

• 5G devices set to mature soon. China is likely to issue 5G licenses to telecom carriers in the second half of next year at the earliest as the nation scrambles to commercialize next-generation mobile communication technology, Wang Zhiqin, an expert with the Ministry of Industry and Information Technology, told China Daily.  [China Daily]   
• Hong Kong plans to overtake Nasdaq as listing destination of choice for Chinese biotech firms. Hong Kong’s stock exchange has set a goal of overtaking New York’s Nasdaq market within five years in the number of listings of mainland Chinese biotechnology firms and their market capitalisation, according to its chief.  [SCMP]      
• China to Allow Foreign Payment Cos. to Enter Domestic Market. Foreign institutions should set up entities in China to offer electronic payment service in the nation, China central bank says in a statement. Foreign payment companies are required to store personal and financial information in China.  [Bloomberg] 
• Corporate News
• Hong Kong’s Cathay Pacific looks to food revamp and new lounge to help boost flagging fortunes. HK’s largest airline is to revamp its airport lounges and in-flight food, as it seeks to compete in an increasingly crowded market. Cathay Pacific Airways’ main customer service focus in 2018 would be improving catering, managers said, raising an aspect of its offering that many customers see as a weakness.  [SCMP]
• Alibaba eyes bigger growth in imports. Alibaba Group Holding Ltd has set a target of 1 trillion yuan ($158 billion) for its transaction volume on imported goods over the next three years, as China gears up to host its first import expo in November.  [China Daily]
• Tencent invests in German startup N26. Tencent Holdings Ltd has expanded its presence in Europe with an investment in German startup N26. Valentin Stalf, CEO and co-founder of N26, said the funds would be used for the company's overall growth strategy and int’l expansion, particularly into the United States and the United Kingdom.  [China Daily] 
• China Mobile Profit Gains as Data Use Makes Up for Fee Drop. China Mobile’s 2017 profit rose as more consumers switched to 4G, making up for a govt. order to scrap roaming fees. Net income climbed 5.1% to RMB114.3bn in 2017. Its overall subscriber base rose by about 9.5mn, bringing the total number of 4G users to c.650mn.  [Bloomberg]
• Lenovo Announces ‘Indicative’ Bond Buyback Tender Results. World’s 2nd-largest PC maker says tender cap has not been exceeded when buyback offer closed on March 21,according to a Hong Kong stock exchange filing.The company received $653.956mn worth of 2019 notes on preferred basis;$366.023m on non-preferred basis.  [Bloomberg]
• Most Kwai Chung Hottest H.K. IPO Among Retail Investors. Most Kwai Chung IPO’s retail portion is oversubscribed by 6,290 times, overtaking Magnum to become the most popular IPO in terms of retail investors’ subscription ratio, Ming Pao reports.  [Bloomberg] 
• Lufax Is Said to Hold Off on Hong Kong Listing. Lufax has decided to wait until it becomes clear when China Banking Regulatory Commission will require online lenders to apply for a license, which would be needed to continue to operate, FT reports.  [Bloomberg] 
• HK Exchange’s Bet on China Is Suddenly Under Threat. Hong Kong’s stock exchange may have to dial back its ambition to become the indispensable conduit between China’s capital markets and rest of the world. A slew of developments this month suggest that Chinese officials are increasingly focused on building up China’s domestic markets, rather than deepening ties with HKEx.  [Bloomberg]
• Ping An Insurance to Keep Dividend ’Relatively Stable’. Chief financial officer Jason Yao says at a briefing in Hong Kong. Ping An seeks to extend average maturity of fixed income portfolio this year as interest rates rise, Chief Investment Officer Chen Dexian says in Shanghai.  [Bloomberg]
• Tencent Doubles Profit But Warns Spending to Weigh on Margins. Tencent Holdings Ltd. said investments in content and technology will weigh on margins after Asia’s most valuable company posted quarterly profit that topped projections.  [Bloomberg]
• Melco Resorts & Entertainment Ltd. to Buy Back up to $500 million in Ordinary Shares/ADSs. Melco Resorts & Entertainment Ltd. says the program is effective immediately, with purchases made over a three-year period.  [Bloomberg]
• China Southern to Buy Planes From Boeing at $3.24bn Base Price. China Southern’s unit Xiamen Airlines signed contract with Boeing to buy twenty B737-8 aircraft and ten B737-10 aircraft at base price of $3.24bn in total, according to a statement to Shanghai stock exchange.  [Bloomberg]
• Alibaba’s Tmall Global to Open Six New Procurement Points. Alibaba’s Tmall Global, a dedicated channel for cross border e-commerce, plans to establish centers in Japan, South Korea, Hong Kong and in regions of North America, Europe and Oceania.  [Bloomberg]
• Anbang Redemptions Said to Stabilize After Post-Takeover Spike. Anbang Insurance Group Co., which was seized by China’s government last month, has seen policy redemptions stabilize after surging in the days following the takeover announcement.  [Bloomberg]
• Huawei Said to Be in Talks to Build Blockchain-Ready Smartphon Huawei Technologies Ltd. is considering developing a mobile phone that will be able to run blockchain-based applications. Huawei is in talks to license Sirin Labs’ operating system, called SIRIN OS, to run blockchain applications alongside Alphabet Inc.’s Android system.  [Bloomberg]
• StanChart Is Said to Start Sale Process for Private Equity Unit. Standard Chartered Plc. is kicking off a sale process for its loss-making private equity unit. More detailed information about the unit, which manages about $3.5bn in assets, is expected to be distributed to interested parties in the next few weeks.  [Bloomberg]