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CSCI Morning News Circular - 20180417

1. Macro News

• China Boosts Its U.S. Treasuries Holdings by Most in Six Months. China’s holdings of Treasuries rose by the most in six months, underscoring the attractiveness of U.S. assets even amid trade tensions between the world’s two largest economies.  China’s ownership of U.S. bonds, bills and notes increased by $8.5 billion to $1.18 trillion in February. [Bloomberg]    
• China to post strong growth figures for first quarter, economists. The Chinese economy is expected to have tuned out all the background noise and powered ahead in the first quarter. According to the median estimate of economists in a Bloomberg News survey, growth maintained a 6.8% pace, well ahead of a target for about 6.5% expansion this year.  [SCMP]    
• IMF says China’s complex fiscal system is in need of a crucial overhaul. China’s sprawling local government financing system needs “crucial” reforms to increase consumption, build prosperity and encourage economic rebalancing, the International Monetary Fund (IMF) said.  [SCMP]

1. Industry News

• Chinese central SOE profits up 19.4% in Q1. China's central State-owned enterprises saw their net profits surge 19.4 percent in the first quarter of the year, China's top SOE regulator said Monday. The total revenues of central SOEs increased by 8.7 percent year-on-year to 6.4 trillion yuan (about $1.02 trillion) in the first quarter.  [China Daily]    
• Automobile sales cruise ahead in Q1. Carmakers in China sold 7.18mn cars in the first quarter of the year, up 2.8% from a year ago, according to data released by the China Association of Automobile Manufacturers. The growth was primarily the result of a 4.7% growth in March sales, which reached 2.66 million cars in the month.  [SCMP]    
• Shanghai Stock Exchange sees higher ratio of orders from institutional investors. The Shanghai Stock Exchange saw an increasing ratio of orders from institutional investors last year, the institution said in a report. The overall market quality index has risen to a record high of 556 points in 2017, up 19.8 percent year on year, according to the report.[China Daily]    
• Corporate News
• Industrial Securities eyes Hong Kong IPO to bolster financial strength. Industrial Securities, a mid-sized mainland brokerage based in Fujian province, is studying a plan to list shares in Hong Kong to enlarge its capital base following a private share placement to raise 8 billion yuan (US$1.27 billion) on the mainland stock market.  [SCMP]    
• com to buy a third of Allianz’s China general insurance unit for US$85mn. JD.com will buy a third of Allianz China General Insurance for 537mn as part of its push into financial services. The purchase will make Beijing-based JD.com the second-largest shareholder in the insurance company after Allianz Group, according to a JD spokesman.  [SCMP] 
• Investors propel shares of Hainan linked companies on plans to start horse racing, sports lotteries. Shares of most Hainan-based companies jumped by their 10% daily limit on Monday after Beijing said it would allow the southernmost province to develop horse racing and sports lotteries as part of plans to turn the island into China’s biggest pilot free-trade port.  [SCMP]    
• Rusal’s Hong Kong listed stock sinks as US plans to slap fresh round of sanctions on Russia. Rusal plummeted nearly 30% in Hong Kong to a new low, adding to the 56 per cent plunge last week, following news that the Trump administration on Monday plans to impose a new round of sanctions on Russia for supporting Syria.  [SCMP]    
• China’s Hainan Airlines steps up international push with 24bn yuan private placement. Hainan Airlines is stepping up its international expansion with 11bn in aircraft acquisitions on the cards, its second major purchase in three weeks, as the mainland’s fourth-largest carrier strives to catch up with its bigger competitors at home and abroad.  [SCMP]    
• Xiaomi has hired Citic Securities to issue Chinese depositary receipts ahead of Hong Kong IPO. The Beijing-based company may file for a public listing as soon as next month and is targeting a valuation of about US$100bn. The CDR is most likely to come after the IPO in Hong Kong and its size is yet to be decided.  [SCMP]   
• China’s WM Motor bets on factory expansion in push to get ahead in electric car market. China’s WM Motor Technology, an electric car start-up founded by the former China head of Volvo Car Corporation, plans a 4.3bn yuan expansion of its factory near Shanghai as it aims to deliver affordable vehicles and get ahead of local competition.  [SCMP]    
• Unilever, Alibaba's Tmall join forces to set up R&D center for health products. Rotterdam-based consumer goods company Unilever Plc and Tmall, Alibaba's online marketplace for reputable retailers, have built a new research and development center to promote health-related products.  [China Daily]
• Shanghai Electric to construct solar facility in Dubai. Shanghai Electric Group signed an engineering procurement construction contract on Friday to build the world's largest concentrated solar power project in Dubai, marking the State-owned company's ambition to grow into a world leading brand.  [China Daily]
• Domestic carmakers ramp up smart development, connectivity. Chery Automobile revealed its CheryLion intelligent development plan, and launched its first smart model Tiggo 8, a mid- to large-size sport utility vehicle. Dongfeng Motor's passenger vehicle brand Dongfeng Fengguang's iX5 smart crossover model was also launched.  [China Daily]
• Ford bets on locally-produced new lineup to turbocharge sales in China. After an almost two-year lull in its product cycle, Ford Motor Co is poised to ratchet up its efforts in China, starting with locally produced new Focus and Escort models that will hit the market by the end of the year.  [China Daily]
• Rusal: Selling Norilsk Nickel at This Stage Not In-line with Company & Shareholder Interests. As quoted from Rusal's announcement, being included into the Specifically Designated Nationals List issued by OFAC of US Treasury, the company believes that it is not in the best interests of the company and its shareholders as a whole to seek mandate for the potential shoot out transaction of Norilsk Nickel at the current time.  [AAStocks]
• Ping An Good Doctor Reportedly Passes Listing Hearing; To List in Early May. Ping An’s subsidiary Ping An Good Doctor has passed the listing hearing in Hong Kong, according to varying reports. Ping An Good Doctor plans to have road show from 23 April (next Monday) to 26 April (next Thursday). It is intended to float on stock market on 4 May.  [AAStocks]
• ICBC to pitch Singapore public floats by Chinese companies. The Singapore branch of the Industrial and Commercial Bank of China (ICBC Singapore) on Monday launched investment banking services after receiving accreditation as an issue manager from Singapore Exchange.  [The Standard]
• com brings China Resources Vanguard shops on to retail platform. Chinese e-commerce platform JD.com is partnering with mainland retail conglomerate China Resources Vanguard in a deal that brings Vanguard’s retail shops in Hangzhou and Nanjing to its online-to-offline platform.