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CSCI Morning News Circular - 20180327

1. Macro News

• S. Seeks Deal With China in Bid to Avert Trade War. Treasury Secretary Steven Mnuchin said he’s optimistic the U.S. can reach an agreement with China that will avert the need for President Donald Trump to impose tariffs on at least $50 billion of goods from the country.  [Bloomberg]   
• S. and South Korea Reach Trade Agreement. The U.S. and South Korea reached an agreement on revising their six-year-old bilateral trade deal and the U.S. said it wouldn’t impose President Donald Trump’s tariffs on steel imports from its ally in Asia.  [Bloomberg]   
• New PBOC chief intends to accelerate opening-up. China will work to accelerate financial opening-up, further taxation reform and continue strengthening regulations to reduce systemic risks and control the debt level. The next step in facilitating opening-up of the financial sector, a series of reforming measures to ease market access for foreign investors will be launched in the future, Yi Gang, the newly elected governor of the PBOC said.  [China Daily]        

1. Industry News

• Iceland Signs $250mn Deal to Clean Up Chinese Power. Iceland just signed the biggest deal in its history to provide the Chinese economy with the technology it needs to deliver clean, geothermal heat. The agreement affects up to 15mn people in Xiong’an, a new economic area southwest of Beijing established by President Xi Jinping. [Bloomberg]   
• China launches crude oil futures trading. China on Monday launched trading of the yuan-denominated crude oil futures contracts at the Shanghai International Energy Exchange, which is the first futures listed on China's mainland to overseas investors.  [China Daily]      
• Reserve Bank of New Zealand adds employment to mandate. New Zealand’s central bank has changed its mandate to consider employment as well as inflation when setting interest rates and making other monetary policy decisions. The change comes into effect Tuesday as part of an agreement when incoming Reserve Bank Governor Adrian Orr begins his five-year term.  [The Standard] 
• Corporate News
• Noble Group Says Shareholders Risk Wipeout Should Plan Fail. Embattled commodity trader Noble Group Ltd. issued a defense of its planned restructuring, saying that if shareholders vote down the plan, it will probably enter insolvency proceedings in the U.K. or file for liquidation and existing equity holders risk being wiped out.  [Bloomberg]
• Vanke Vows Prudent Investment After 2017 Profit Beats Estimate. China Vanke Co. said it will press ahead with “prudent” investment in its core development business amid China’s property tightening as it reported full-year profit  that beat analyst estimates.  [Bloomberg]
• Great Wall hopes to drive into US market in 2021. Great Wall Motors Company aims to enter the United States market in 2021, according to company chairman Wei Jianjun. But the company has no plans to build a plant there amid uncertainty over whether the Trump Administration will raise its currently low import tariff on Chinese cars.  [SCMP]
• Alibaba and Ford unveil car vending machine in Guangzhou. Alibaba Group and Ford have unveiled an unstaffed car vending machine in Guangzhou. Alibaba said users of Tmall, Alibaba’s flagship online shopping platform, with good credit scores can buy a car from the machine, without any human help, in under 10 minutes.  [SCMP]
• Sinopec sets target for production cost cuts. China Petroleum & Chemical Corp aims to cut its production cost by up to USD15 a barrel in three years. CEO Wang Dehua said this would help the firm’s goal in restoring profitability. Sinopec’s operating loss narrowed by 11.3bn yuan last year after excl. a one-off non-operating gain on its pipelines.  [SCMP]
• Alibaba to set up Thai logistics centre, extend deepening investment in SE Asia. Alibaba is in talks with the Thai govt to set up a logistics centre in the country as part of its aggressive expansion into the SE Asia region, bringing the company a step closer to fulfilling founder and Jack Ma Yun’s dream of empowering small companies to trade globally. [SCMP]
• Top three Chinese airlines tipped for profit surges on tourism boom, yuan gains. China’s three largest airlines, China Southern, Air China and China Eastern, are likely to report their strongest annual profits in years this week, as soaring travel demand and foreign exchange gains more than make up for a drop in income per passenger and the rising cost of fuel.  [SCMP]
• Five HK-listed Chinese property developers to see big rises in 2017 profit. China Vanke, China Evergrande Group, China Overseas Land & Investment, Sunac China Holdings and Shimao Property Holdings are expected to report combined net profits of just over 100bn yuan for 2017, thanks to surging property sales.  [SCMP]
• Banks of Morocco, China join hands to promote bilateral trade, investment. Morocco's BMCE Bank of Africa and the China Development Bank  have inked a memorandum of understanding to enhance bilateral trade and investment, local media reported.  [SCMP]
• Tencent retail investments not sign of retail launch. Chinese internet giant Tencent Holding Ltd has invested in several traditional retailers, such as Carrefour SA's China unit and Yonghui Superstores, but its chairman, Pony Ma Huateng, said that the company does not plan to directly take up retail business itself.  [SCMP]
• Chinese automaker FAW moves to new HQ, aiming for world-class car brand. FAW Group has moved to new headquarters in northeast China's Jilin Province, the group announced Monday. The new HQ, close to the previous one, consists of 14 buildings, including offices, labs, and convention and logistics centers.  [SCMP]   
• China Overseas Land & Investment core profit up 9.2 percent, but lags analysts’ estimates. China Overseas Land & Investment, the country’s top property developer by market value, logged a 9.21 per cent rise in core profit, mainly driven by property sales.   [SCMP]   
• Alibaba to train Asian entrepreneurs in e-commerce innovation. E-commerce giant Alibaba Group Holding Ltd will train a class of 37 Asian entrepreneurs on e-commerce innovation under a partnership with the United Nations Conference on Trade and Development.  [China Daily]        
• BMW to recall 44,052 cars with safety hazards in China. BMW China and BMW Brilliance Automotive will recall 44,052 cars in China due to manufacturing defects, according to China's top quality supervisor. The recall will start on June 11, 2018.  [China Daily]   
• ADB provides $175.3m geothermal energy investment in Indonesia. The Asian Development Bank signed a loan agreement of approximately $175.3 million on Monday with PT Supreme Energy Rantau Dedap to help finance the company's geothermal power project in Indonesia's South Sumatra province.  [China Daily]