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CSCI Morning News Circular - 20180420

1. Macro News

• IMF warns shadow banking poses high risk to China’s financial stability. China has been urged by the International Monetary Fund to address threats to its financial system by increasing oversight of shadow banking from unregulated lenders and exercising tighter control of the fast growing insurance sector.  [SCMP]   
• China Repeats It’s Ready to Protect Companies After U.S. ZTE Ban. China reiterated that it’s “ready to take necessary steps” to protect domestic companies, the latest salvo after the U.S. sanctioned the country’s No. 2 telecommunications gear maker.  [Bloomberg]    
• China sees lower forex deficit in first quarter. Chinese commercial banks reported a significant drop in net foreign exchange sales in 1Q as cross-border capital flows stayed balanced and stable,. Forex purchases by banks stood at $154.4bn and sales stood at $163.6bn in Mar, a transaction deficit of $9.2bn, up from $8.2bn in Feb.  [China Daily] 

1. Industry News

• China Plans to Raise QDLP, QDIE Quota. China will continue promoting capital account opening up and plans to raise quota for Qualified Domestic Limited Partner and Qualified Domestic Investment Enterprise, State Administration of Foreign Exchange spokeswoman Wang Chunying says at briefing.  [Bloomberg]    
• China Sorghum Importers Struggle to Find Buyers Because of Duty. Importers of U.S. sorghum are struggling to find buyers for more than 20 cargoes already on the way to China after government imposed anti-dumping deposits from Wednesday, according to analysts and traders.  [Bloomberg]
• Foreign Investor Buys China RMBS Via Bond Connect for First Time. A foreign institution has bought securities backed by residential mortgage loans via the bond connect program, becoming the first overseas investor in such products through the investment channel, according to an emailed statement from China Securities.  [Bloomberg]   
• Corporate News
• Good Doctor Aims to Raise Up to HK$8.77bn in H.K. IPO. Ping An’s Good Doctor plans to issue 160mn shares in its proposed Hong Kong initial public offering, The Standard reports. Accordingly, Good Doctor is “tipped” to price the IPO at between HK$50.80 and HK$54.80 apiece.  [Bloomberg]
• China Says Qualcomm Needs More Remedies for NXP Deal Approval. China’s regulators are seeking additional remedies from Qualcomm Inc. before approving its proposed purchase of NXP Semiconductors NV, adding further complications to a deal the U.S. chipmaker is counting on to survive as an independent company.  [Bloomberg]
• Putuoshan Tourism Withdraws Shanghai IPO Application. Putuoshan Tourism Development has withdrawn its IPO application upon request by China’s securities regulator, according to a statement from China Securities Regulatory Commission.  [Bloomberg]
• Infiniti Bets Big on China’s SUV Demand to Challenge Audi, BMW. Luxury-car maker Infiniti is betting big on China, planning to introduce five locally-produced vehicles in a bid to triple sales in the world’s largest auto market over the next half-decade, said Roland Krueger, president of the Nissan Motor Co. unit.  [Bloomberg]
• Rusal Said to Discuss China Deals to Ease Sanctions Crunch. United Co. Rusal officials met Chinese companies and traders this week to discuss the possibility of buying alumina and selling aluminum in the Asian country as U.S. sanctions freeze out the Russian producer from markets around the world.  [Bloomberg]
• HNA Unit HKICIM Says It has No Plan to Sell Hong Kong Site. Hong Kong International Construction Investment Management Group “has no intention to dispose of its interest in” its last site in Hong Kong’s Kai Tak area,according to statement to Hong Kong stock exchange.  [Bloomberg]
• HNA Sold Stake in Guangzhou Rural Commercial Bank for HK$1.51bn. HNA sold its 295.2m shares in Guangzhou Rural Commercial Bank on exchange on April 10 and 16, according to disclosure filings to Hong Kong stock exchange. HNA raised about HK$1.51b from the disposal.  [Bloomberg]
• CGN Power’s 1Q Profit, Excluding Previous Year’s Gain, Rises 31%. CGN Power’s Co.’s increase in 1Q net profit without counting last year’s one-off gains was 593m yuan on higher power generation, it says in statement to the Hong Kong stock exchange.  [Bloomberg]    
• Wynn Resorts Appoints Three New Independent Directors. The Board of Directors of Wynn Resorts (NASDAQ: WYNN) announced that it has expanded its board to 11 members,with the appointment of Betsy Atkins, Dee Dee Myers and Wendy Webb as independent directors, effective immediately.  [Bloomberg]  
• China Beidahuang to Invest 960M Yuan to Build Fuel Ethanol Plant. China Beidahuang Industry Group will invest 960m yuan to build a fuel ethanol plant as the country plans to expand ethanol use in vehicles nationwide by 2020, co. said in a statement.  [Bloomberg]  
• Rusal Is Said to Rent More Space for Aluminum Stockpile. The company has had to rent out additional space for its aluminum stock that it has been unable to sell as a result of U.S. sanctions, Reuters says. Rusal shareholder Oleg Deripaska visited Sayanogorsk plant this week for closed-door meeting with staff. [Bloomberg]  
• ZTE Says It Will Seek Solution to U.S. Ban by Legal Means. The company will communicate actively and seek solution to U.S. exporting ban by legal means, according to filing to the stock exchange. A-shares to remain suspended.  [Bloomberg]  
• LeEco founder Jia Yueting receives financial lifeline from mystery HK investor. Jia Yuetinghas received a funding lifeline from a mysterious Hong Kong investor, Caixin reported. Shi Ying, a British Virgin Islands registered company, has agreed to invest US$2bn into Jia’s company Faraday Future, in several tranches, for a 45 per cent stake of the company.  [SCMP] 
• China Datang to further tap B&R nations by expanding overseas. China Datang Corp, one of the largest power generation enterprises, will seek enhanced cooperation and solidify overseas expansion this year, in a move to further integrate into the Belt and Road Initiative, said its chairman.  [China Daily]
• Huawei 5G base station can legally be placed in EU market. Huawei's 5G base station can legally be placed on the EU market with the certificate it gained, German certification body TUV SUD said. It made Huawei the first company to receive a CE type examination certificate for its 5G products, paving the way for its commercial use and sale within the EU.  [China Daily]
• Tencent Reportedly Plans to Buy Stake in India Online Sports Games Platform 'Dream 11'. Tencent is in negotiation to invest in India online sports games platform Dream 11 at US$100mn, meaning the target will have US$400-450mn valuation. Tencent has reportedly submitted related proposal to Dream 11.   [AAstocks]  
• Medical Startup Grail Seeks to Further Raise US$1bn before HK IPO. As quoted from Bloomberg, the cancer-screening startup Grail Inc. intends to further raise US$1 billion ahead of its planned IPO in Hong Kong this year. The company is currently under discussion with its consultants over the matter.   [AAstocks]