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CSCI Morning News Circular - 20180411

1. Macro News

• Xi Jinping reveals economic plans at Boao Forum. Xi Jinping highlighted his support for opening up markets and regional economic integration. Xi said he is confident that with these efforts, China's financial market will be more competitive, the building of modern industries will be accelerated, and intellectual property rights will be effectively protected - as China enters a "new phase of opening up."  [SCMP]
• Xi promises to open doors wider. Xi Jinping yesterday vowed to further open the nation’s economy and rallied support for globalization, charting out a leadership role in forgoing international cooperation and promoting free trade. Beijing would also lift foreign ownership restrictions in the car industry, he said, a clear hint that firms might soon be allowed to set up wholly owned plants in China without needing a local partner.  [SCMP]
• Trump to Attempt Cutting Back on $1.3tn Spending Deal. With the federal budget deficit expanding and congressional elections seven months away, the Trump administration plans to ask Congress for cuts in domestic programs that were part of a bipartisan $1.3tn spending bill that President Donald Trump signed last month.  [Bloomberg]   

1. Industry News

• China Banks Flash Warning on Corporate Bond Surge. China banks are flashing a warning on the nation's surgingcorporate bonds. While commercial lenders own near-record amounts of government debt, they've kept their stake in corporate securities close to the lowest levels since 2010.  [Bloomberg]    
• China telecommunications industry revenue up 4.9%. China's telecommunications industry revenue grew steadily in the first two months mainly due to fast expanding mobile data and mobile internet services, official data showed. Revenue rose 4.9% YoY to 216.8bn in the Jan-Feb period, according to MIIT.  [China Daily]    
• China's smartphone shipments continue to drop in Q1. China's smartphone shipments continued to drop in the first quarter of this year. Domestic smartphone shipments reached about 81.87mn in the first three months of 2018, down by 27% YoY, according to a report by the China Academy of Information and Communications Technology.  [China Daily] 
• Corporate News
• HSBC Is Looking to Change Its ROE Target, CEO Flint says. Working with board to refresh ROE target from current 10%, CEO John Flint says in Hong Kong. Share buyback policy remains unchanged; on course to set up U.K. ring-fenced bank. Will consider acquisitions but Plan A is organic growth, Flint says.  [Bloomberg] 
• Alibaba-Backed Carmaker Seeks $2.7 Billion to Challenge Tesla. Xiaopeng Motors, which counts Alibaba Group Holding Ltd. and Foxconn Technology Group among its investors, plans to raise 17 billion yuan ($2.7bn) in funds this year as the Chinese car startup seeks to take on rivals in the world’s biggest market for electric vehicles.  [Bloomberg] 
• BMW, Toyota Get Reprieve in Crosshairs of U.S.-China Trade Spat. Global carmakers from BMW AG to Toyota Motor Corp. got some good news from China after President Xi Jinping reiterated a pledge to reduce import tariffs on vehicles this year. China will “significantly lower car import tariffs” and “sincerely hopes to boost imports,” Xi said.  [Bloomberg] 
• TCL Multimedia to Boost Capacity in Mexico Amid U.S. Tariff Plan. The company has started planning to increase production capacity of the Mexican factory and to take other measures to reduce the impact on its operation in the U.S., it says in filing to Hong Kong stock exchange.  [Bloomberg]
• PICC Group Seeks to Issue Up to 4.6bn Shares in Shanghai IPO. PICC Group Seeks to Issue Up to 4.6B Shares in Shanghai IPO. The IPO will help company replenish capital and increase solvency, according to preliminary prospectus on website of China Securities Regulatory Commission.  [Bloomberg]
• Yanzhou Coal Says Arbitration Notice Involves 1.44bn Yuan. Inner Mongolia New Changjiang Mining & Investment requested co. to pay for the violation of equity transfer agreements, according to a statement from Hong Kong stock exchange.  [Bloomberg]
• Bank of China to List $40B Medium-Term Note Program in H.K. Bank of China applied to the Hong Kong Stock Exchange for listing of program for 12 months from April 3 for debt issuance to professional investors, according to exchange filing.  [Bloomberg]
• Longfor Says Chairwoman’s Family Trust Increases Stake to 43.67%. Substantial shareholder Charm Talent bought 3.76mn shrs at avg HK$23.4509 apiece between April 3-4, Longfor Properties says in exchange filing. Charm Talent is held by HSBC Int’l Trustee, which is trustee of a family trust set up by Longfor Chairwoman Wu Yajun.  [Bloomberg]
• Powerlong Real Estate Proposes Issue of Senior Notes. Powerlong Real Estate proposes to conduct an international offering of senior notes to professional investors, according to statement to Hong Kong stock exchange. Proceeds to be used for refinancing existing debts and for general corporate purposes.  [Bloomberg]
• China Energy Giant ‘Confident’ U.S. Energy Ties Set to Deepen. The head of China National Petroleum Corp., China’s largest natural gas importer, believes the country’s energy ties with the U.S. are set to deepen, despite escalating trade tensions between the world’s two largest economies that have roiled financial markets.  [Bloomberg]
• Tencent eyes big picture as it forms partnership with Tang Media and China Everbright. Tencent is increasingly making its presence felt in the country’s booming film sector, with its film production and distribution arm Tencent Pictures forming a consortium with media and entertainment company Tang Media Partners and investment firm China Everbright.  [SCMP]
• China’s CCB makes residential leasing sector its new battlefield. A few months after its foray into the country’s underdeveloped residential leasing market, China Construction Bank Corp said it would also offer a host of ancillary businesses to allay investors’ fear of unprofitability in the sector.  [SCMP]
• Chinese property giant builds reputation with project in London. A consortium formed by Guangdong-based Country Garden and an unnamed Hong Kong fund bought land in Ailsa Wharf from United Kingdom developers Galliard Homes and Lindhill Homes for 80mnn pounds ($113mn).  [China Daily]
• Bloomberg Deletes Rusal Share Price Info; Multinational Banks Bar Rusal Stake. Rusal said on Monday that the company and its substantial shareholders were weighed sanctions by the US. It was reported that banks have barred customers from buying shares of Rusal since Monday, but still allow them to sell.  [AAStocks]
• Ping An Good Doctor Said to Undergo Listing Hearing This Thu; Public Offering at End-Apr. Ping An HealthCare and Technology Co. Ltd, whose principal business is Ping An Good Doctor and which is the first new economy enterprise spun off from PING AN will undergo listing hearing this Thursday (12 April), Hong Kong Economic Journal reports.  [AAStocks]
• China Railway sees double-digit boom in new orders. China Railway forecast double-digit growth for new orders in 2018. President and executive director Zhang Zongyan also said he expects orders by real estate developers to further increase. He is confident about new contracts arising from the country's new economic initiatives.  [The Standard]