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CSCI Morning News Circular - 20180515

1. Macro News

• Money supply growth slows in April. China's broad money supply maintained a low growth rate of 8.3 percent in April, along with flat new yuan loan expansion even as policymakers continued financial deleveraging, according to data from the People's Bank of China.  [China Daily]  
• ECB's Villeroy Sees Rate Hike ‘Quarters’ Not Years After QE End. European Central Bank policy maker Francois Villeroy de Galhau said the institution’s first interest-rate increase could come “at least some quarters, but not years” after policy makers end their bond-buying program.  [Bloomberg]    
• Sri Lanka Holds Benchmark Rates as Consumer Prices Ease. Sri Lanka’s central bank kept monetary policy on hold after a deceleration in inflation allowed room for a pause. Governor Indrajit Coomaraswamy held the standing lending facility rate at 8.50% and the standing deposit facility rate at 7.25%, Central Bank of Sri Lanka said in statement.  [Bloomberg]    

1. Industry News

• China Is Said to Curb Banks’ Sale of Some Structured Deposits. Chinese regulators plan to stop the sale of certain structured deposits, said people familiar with the matter, limiting a funding route banks had increasingly been using since a clampdown on risky wealth management products.  [Bloomberg]    
• Chinese listed companies propose to pay investors record 1tn yuan in cash dividends. Dividend payouts by Chinese publicly traded companies might have exceeded 1tn yuan for the first time in 2017, as regulators push for increased cash payments to shareholders. About 79% of the 3,494 companies trading on the Shanghai and Shenzhen stock exchanges have proposed a total cash dividend of 1.07tn yuan, up 15% YoY.  [SCMP]    
• HKMA poised to launch HK$150 million pilot bond scheme. The HKMA says its anticipated pilot bond grant scheme (being dubbed the PBGS), earmarked for HK$150mn, will be launched soon. The three-year strategy is part of the govt’s overall HK$500mn fund aimed at boosting the city’s competitiveness in the financial services industry, and raising its share of the Asian bond market.  [SCMP]         
• Corporate News
• China restarts review of Qualcomm’s US$44b NXP purchase. Chinese regulators have restarted their review of Qualcomm’s application to acquire NXP Semiconductors after having shelved the work earlier in reaction to growing trade tensions with the United States.  [SCMP]  
• Foxconn unit gets green light to start fundraising for US$4.3 billion IPO, China’s biggest in three years. Foxconn Industrial Internet, a unit of the world’s biggest contract manufacturer whose products include Apple’s iPhones, edged closer to an IPO of 27bn yuan (US$4.27bn) after Chinese regulators gave it the green light to start fundraising.  [SCMP]  
• ZTE could resume operations ‘within weeks’ following Trump’s pledge to help the company. Chinese telecoms company ZTE could resume operations within the next two to three weeks, after US President Donald Trump pledged to give it “a way back into business, fast”, analysts say.  [SCMP]   
• China Tower Corporation Files Hong Kong IPO Application. China Tower Corp, the world’s largest telecommunications, tower infrastructure service provider files IPO application to HKEX, according to statement to stock exchange.  [Bloomberg]
• EDP Said to Plan Rejecting $10.9 Billion-China Takeover Bid. EDP-Energias de Portugal SA is poised to reject a 9.1 billion euro ($10.9 billion) takeover offer from China Three Gorges Corp. on the grounds that it undervalues Portugal’s biggest energy company.  [Bloomberg]
• Down $77 Billion in Value, Tencent Faces Worst Margins Ever. After the giddy heights of January when its shares hit an all-time high, Tencent Holdings Ltd. has shed $77 billion in value as investors price in the costs of the Internet giant’s massive spending spree.  [Bloomberg]
• HSBC Says Trade Deal Shows Blockchain Viable for Trade Finance. HSBC Holdings Plccompleted a transaction using blockchain which it said shows the technology is commercially viable for trade finance. The transaction was an end-to-end trade between a buyer and a seller and their respective banks that was completed on one shared digital application rather than multiple systems, according to HSBC.   [Bloomberg]
• Chinalco Exports 30kt Alumina, China Nonferrous Metals News Says. Aluminum Corp. of China, country’s largest state-owned aluminum producer known as Chinalco, signed agreement to export 30kt alumina in April, China Nonferrous Metals News says on its wechat account.  [Bloomberg]
• Wynn Resorts Announces Further Changes to Board of Directors. Wynn Resorts, Limited announced that Director John J. Hagenbuch has decided not to stand for re-election to the Board of Directors at the Annual Meeting of Shareholders on May 16, 2018.  Director Robert J. Miller has also tendered his resignation from the Board.  [Bloomberg]
• StanChart Is Said to Market $1.5bn of Buyout Deals. Standard Chartered Plc’s three-year saga to exit its loss-making private equity business, which has investments ranging from Jordanian poultry to a Korean restaurant specializing in garlic, has finally reached the endgame.  [Bloomberg]  
• Q Technology Expects 1H Pretax Profit Down 50% or More on Year. Q Technology’s 1H consolidated pretax profit is expected to decline by ~50% or more as compared with same period year earlier, according to statement to Hong Kong stock exchange.  [Bloomberg]   
• Angang Steel to Sell HK$1.85bn of Convertible Bonds Due 2023. Initial conversion price is HK$9.54 per H share, representing ~15% premium to last close in Hong Kong, according to statement to Hong Kong stock exchange. Proceeds to be used for general corporate purposes.  [Bloomberg]
• LVGEM China Plans to Sell $100mn Convertible Bonds Due 2023. Convertible bonds will be issued by company unit with interest at 4.00% per annum, LVGEM China says in Hong Kong stock exchange filing. Company plans to use proceeds for project development, debt refinancing and/or general corporate purposes.  [Bloomberg]
• Rusal Says Prospects Unclear as U.S. Sanctions Roil Aluminum. United Co. Rusal said its long-term prospects remain uncertain, as the top aluminum producer outside China declined to give forecasts in a quarterly earnings report that predates last month’s punitive U.S. sanctions.  [Bloomberg]
• Fosun Pharma Is Said to Vie for $2bn Novartis Portfolio. Shanghai Fosun Pharmaceutical Group Co. is among shortlisted bidders for a portfolio of Novartis AG assets,including its U.S. dermatology business, that could fetch as much as $2bn.  [Bloomberg]
• BYD to provide LAX with US largest airfield fleet of all-electric buses. Chinese electric automaker BYD will supply Los Angeles International Airport (LAX) with 20 all-electric buses for airfield passenger transportation, which make up the largest airport fleet of its kind in the United States.  [China Daily]