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CSCI Morning News Circular - 20180518

1. Macro News

• China Said to Offer Trump $200 Billion Cut in U.S. Trade Deficit. China has offered President Donald Trump a $200 billion reduction in its annual trade surplus with the U.S. by increasing imports of American products and other steps, said a Trump administration official.  [Bloomberg]  
• Trump Urges To Expand Agriculture Trade with China. S. President Donald Trump says he hopes the two nations can expand agricultural products trade and access to each other’s market, People’s Daily reports, citing a meeting with Chinese Vice Premier Liu He.  [Bloomberg]  
• Growth Risks Mount in Malaysia With Economic Policy in Flux. Malaysia’s economy grew at its slowest pace since 2016, underscoring risks that will only heighten this year as the newly installed government of Mahathir Mohamad overhauls policy. Expansion eased to 5.4% in the 1Q, lower than the 5.6% median estimate in a Bloomberg survey.  [Bloomberg]  

1. Industry News

• LME takes aim at booming electric car market with new contracts for battery metals. The London Metal Exchange will begin offering contracts in metals used in batteries within 18 months to capture the huge opportunities created by the rise of the electric car. New futures contracts to be launched will include lithium, graphite and manganese, while additional contracts for the already tradeable nickel, copper, cobalt and aluminium will be explored.  [Bloomberg]    
• Telecoms to grant VNO partners support. China’s domestic telecommunications operators plan to further support virtual network operators, and significantly reduce the wholesale price for their VNO partners in the future, Economic Information Daily reported.  [China Daily]    
• Global 5G race starts to heat up. The commercialization of 5G is entering the home stretch, as countries in the world anticipate the launch of the 3GPP 5G standard's Release-15 by June, according to a report by National Business Daily. [China Daily]         
• Corporate News
• Tencent, China Comm Cons Sign Strategic Cooperation Pact. Tencent and China Communications Construction to promote business and technology cooperation,Hong Kong Economic Journal reports, citing strategic agreement between the two companies. Cooperation will focus on connection, data and services.  [Bloomberg] 
• Contract Drug Researcher Viva Is Said to Prepare Hong Kong IPO. Viva Biotech (Shanghai) Ltd., a Chinese contract drug researcher, is planning a Hong Kong initial public offering. The company aims to sell shares as early as the second half of this year. It is considering seeking about $200 million from the offering.  [Bloomberg] 
• SMIC Is Said to Order EUV System From ASML. SMIC has placed a $120m order for its first EUV lithography equipment with ASML. ASML said it treats customers worldwide, incl. its Chinese clients, equally and there are no restrictions according to the Wassenaar Arrangement to sell EUV equipment to Chinese customers.  [Bloomberg]  
• Chalco Pushing for Removal of China’s 15% Aluminum Export Tax. “It is a hope and we are anticipating it,” Lu Dongliang, president of Aluminum Corp. of China Ltd., says in interview. “But we don’t know when the taxation will be removed. We believe that trade shouldn’t be stopped by tariffs and will keep pursuing it,” Lu says.  [Bloomberg] 
• HKEX’s Li Says Mainland Metals Platform Needs a Lot of Patience. The establishment of a mainland physical commodities trading platform, planned by Hong Kong Exchanges & Clearing Ltd., is still a work in progress, HKEX CEO Charles Li tells delegates at LME seminar in Hong Kong.  [Bloomberg]  
• China Overseas Grand Oceans Is Said to Postpone USD 5Y Bond Sale. China Overseas Grand Oceans Group, a Chinese property developer, has decided to postpone a sale of USD 5Y bonds because of unfavorable market conditions. The company will continue to monitor market conditions.  [Bloomberg]   
• China Builder Plans Rare Floating-Rate Bond in Shaky Market. China Vanke Co., the nation’s largest listed developer by market value, may price a floating-rate bond on Thursday amid rising funding costs spurred by the rush of issuance from the sector.  [Bloomberg]   
• Bank of China Gets Approval to Offer Services in Mexico. Bank of China recently received approval to offer services in Mexico, Reuters reports, citing interview with its local unit deputy CEO Diego Folino.The bank will provide several loan products, wire transfers and basic treasury services.  [Bloomberg]   
• Group led by HK conglomerate New World Development wins Singapore plot for US$306.76mn. New World Development is part of a consortium that has won the tender for a luxury residential site close to Orchard Road, Singapore’s famous shopping and entertainment strip, securing the plot for S$2,377psf, a record for all government residential sites in the city.  [SCMP]          
• Amazon brings cross-border ambitions to Alibaba’s backyard. In the coming weeks, Amazon will host an event in the eastern Chinese city of Hangzhou – Alibaba’s hometown – to connect online merchants with 400 Chinese manufacturers keen to sell electronics, car parts, home goods and more directly to American and European consumers.  [SCMP]          
• Pharma deal could prove among sector’s biggest consolidations yet. China Resources Pharmaceutical Group has confirmed it is in talks to buy a controlling stake in the country’s fifth largest Chinese traditional medicine maker, as part of industry consolidation encouraged by Beijing to cut health care costs.  [SCMP] 
• Lenovo rebuts rumor it failed to back Huawei on 5G issues. Chinese computer maker Lenovo Group issued an internal letter on Wednesday rebutting the market rumor that it failed to back Chinese telecom company Huawei in setting global standards for the fifth generation mobile communications technology.  [China Daily] 
• China Telecom offers satellite phone services. Satellite phone numbers offered by China Telecom - the country's leading mobile carrier - are now available on the market, meaning Chinese archaeologists and fishermen can finally enjoy domestic services when working in remote areas.  [China Daily] 
• Union Medical, Tencent Doctorwork to run 'intelligent' clinics. Union Medical Healthcare said it plans to set up clinics in the city jointly with Tencent Holdings subsidiary Tencent Doctorwork, a digital health service that operates online and brick-and-mortar clinics.  [The Standard] 
• China Mobile: Eyes on CDR Development, Total Tower Cost Kept Under RMB40B This Yr. China Mobile’s Chairman Shang Bing stated after AGM that the management is paying close attention to the return to A-shares by Chinese Depositary Receipts (CDRs). However, the related regulatory requirements are still under enactment.  [AAStocks] 
• China Mobile: Tries Best to Raise Div; To Carry on 5G Development, Biz amid ZTE Inciden Chairman Shang Bing said the company will spare no efforts in raising dividend payout this year. As to whether China Mobile’s 5G development will be knocked down by US sanctions against ZTE, Shang said the company is carrying on the 5G development and other related promotion work, adding ZTE is one of its close partner among major global equipment suppliers.  [AAStocks]