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CSCI Morning News Circular - 20180517

1. Macro News

• Thailand Holds Rate to Boost Growth as Private Investment Drops. Thailand’s central bank left its benchmark interest rate unchanged near a record low to support economic growth amid moderating domestic demand. Monetary policy committee members voted unanimously to hold the one-day bond repurchase rate at 1.5%, where it’s been since 2015.  [Bloomberg]  
• Brazil Holds Key Rate, Ending Its Easing Cycle. Policy makers led by Ilan Goldfajn on Wednesday left the benchmark Selic rate unchanged at 6.50 percent, a move forecast by only two of 39 economists, with the remainder expecting a 13th straight cut.   [Bloomberg]    
• China Data Shows a Hint of Slowdown While Factories Still Hum. China’s economic momentum broadly held up in April with industrial production exceeding forecasts, though slowing investment signaled a moderation in the coming months. Industrial output rose 7% in April from a year earlier, the statistics bureau said, versus a projected 6.4% in a Bloomberg survey and 6% in March.  [Bloomberg]    

1. Industry News

• China’s Holdings of U.S. Treasuries Rise to Five-Month High. China’s holdings of Treasuries rose to a five-month high in March, underscoring the allure of U.S. government debt even amid trade tensions between the world’s two largest economies.  [Bloomberg]    
• China's 5G market to exceed one trillion yuan by 2026. China is becoming a global leader in the research and development of 5G standards and the overall market of country's 5G industry is expected to reach 1.15tn yuan by 2026, a nearly 50% growth from its 4G market, a consulting company said, Economic Information Daily reported. [China Daily]    
• China Coal Output Rises as Miners Ramp Up After Import Curbs. Coal miners in China boosted production to the highest this year after the government imposed restrictions on some imports of the fuel. Output rose 4.4% in April from a month earlier to the equivalent of 9.78mn metric tons a day, according to Bloomberg calculations.  [Bloomberg]         
• Corporate News
• Tencent beats profit expectations with high score from mobile games. Tencent Holdings pulled a first-quarter surprise on Wednesday, announcing a 61 per cent increase in profits on a strong contribution from its mobile games and online advertising businesses.  [SCMP]          
• Chinese firm close to getting hands on vital component for electric car batteries. China’s Tianqi Lithium is nearing a deal to buy a 24 per cent stake in Chile’s Sociedad Quimica Y Minerva (SQM), one of the world’s biggest lithium producers, for around US$4.3bn, according to two sources close to the transaction.  [SCMP]          
• China Resources Pharma Seeks Jiangzhong Group Controlling Stake. China Resources Pharmaceutical and China’s Jiangxi government plan to restructure the Jiangzhong Group through acquisition of controlling stake in Jiangzhong, the pharmaceutical company says in Hong Kong stock exchange filing.  [Bloomberg] 
• Zhejiang Ebang Said to Plan to Raise up to $1bn in H.K. IPO. Zhejiang Ebang Communication plans to raise up to $1 billion from Hong Kong IPO this year, IFR reports.  [Bloomberg] 
• Canaan Creative Is Said to Submit Application for $1bn H.K. IPO. Canaan Creative, a Chinese maker of bitcoin mining equipment, has submitted an application for a Hong Kong initial public offering. Offering could raise around $1bn.The company aims to start trading as soon as July.  [Bloomberg] 
• China Cancer Drug Developer 3DMed Is Said to Plan Hong Kong IPO. Chinese cancer drug developer 3D Medicines Corp. is planning a Hong Kong initial public offering that could seek as much as $500 million. The Shanghai-based company, known as 3DMed, is targeting to sell shares as early as the fourth quarter this year.  [Bloomberg] 
• Belle Owners Said to Mull Sportswear IPO After $7 Billion Buyout. The private equity owners of Belle International Holdings Ltd., the biggest women’s shoe retailer in China, are considering a spinoff of its sportswear distribution business.  [Bloomberg]  
• HSBC’s Saudi Unit to Buy RBS Venture in $5 Billion Stock Deal. HSBC Holding Plc’s Saudi Arabia unit offered to pay a 29 percent premium to acquire Royal Bank of Scotland Group Plc’s local venture in a $5 billion stock deal.  [Bloomberg]  
• China’s Weichai to Subscribe Ceres Power Shares for GBP40mn. Weichai Power will hold 20% stake in U.K. fuel cell producer Ceres Power after the investment, according to statement on Weichai’s website. Two companies will start cooperation on solid oxide fuel cell by setting up joint venture in China’s Weifang city by 2020.  [Bloomberg]  
• Shenzhen, Shanghai bourses buy 25% stake in Dhaka Stock Exchange. Shenzhen Stock Exchange on Tuesday said the bourse plans to help Dhaka Stock Exchange to establish the market of small-sized and medium enterprise board and launch more derivatives.  [China Daily]  
• Korean bank, ICBC set up US$220m cash swap line.Korea's Korea Development Bank said it has signed a liquidity swap deal with ICBC. The agreement on a reciprocal funding line worth US$200mn allows the two banks to provide liquidity for their counterpart in case of a financial emergency, KDB said in a statement.  [The Standard]   
• Tencent: To Mull Cooperation or not with Tesla in China; No Plan for Share Splitting. At the AGM of Tencent, shareholders asked whether the company will consider splitting shares to boost share price. The Executive Director Lau Chi Ping Martin replied that the company did not have plan of doing so.  [AAStocks] 
• Wynn Macau: Ex-chair Incident Not Affect Operation; Still Has Land for Development. Allan Zeman, non-executive Chairman of Wynn Macau, told an interview in Macau that the incident of former chairman Steve Wynn does not have much influence on the company as the company acts swiftly to it.  [AAStocks] 
• Samsung Talks with ZTE & Other Handset Makers on Chip Supply. As Reuters cited a senior management of Samsung, the group is in talks with numerous smartphone manufacturers, including ZTE in China, on supplying mobile processor chips, with an aim at more direct competitions with its major rival Qualcomm.  [AAStocks]
• WeDoctor Plans to Spin off & List Cloud Services, Health Mgmt Biz on PRC, HK Stock Mkt. WeDoctor had earlier been granted US$500mn strategic investment and NWS Holdings shoring up its valuation to US$5.5bn, Mainland media reported. Separately, the co. plans to float its health management business on the Hong Kong stock market. [AAStocks]
• Alibaba, Tianjin Govt Sign Intelligent Industry Cooperation Deals. Alibaba Group entered into multiple cooperation agreements with Tianjin Municipal Government on Tuesday. Alibaba will set up numerous key intelligent industry projects in Tianjin, assisting the related development of the city.  [AAStocks]
• Sands China Ltd. Wong Ying Wai: HK, Macau Can Cooperate with Each Other's Edges. Wong Ying Wai, president and executive director of Sands China Ltd. commented at G2E in Macau that Macau should try its best to solve current issues, including demand for technological talents, and ways to facilitate SMEs development.  [AAStocks]