FREE

CSCI Morning News Circular - 20180521

1. Macro News

• China Agrees to Buy ‘significantly’ More From the U.S., But Doesn’t Commit to Specific Amount. The U.S. and China said Sat. that two days of "constructive" talks between American and Chinese officials in Washington had led to an agreement for China to buy more goods and services, incl. "meaningful increases in United States agriculture and energy exports".  [Bloomberg]  
• Greece Moves Closer to Bailout Exit After Deal With Creditors. Greece and its creditors agreed on the next steps for completing the country’s final bailout review, a key milestone for exiting the program and striking a deal on debt relief. Government officials and representatives from the IMF and euro-area creditor institutions completed a week of discussions in Athens on Saturday.  [Bloomberg]   
• Jakarta raises rate to back rupiah. Indonesia's central bank raised its key interest rate as Southeast Asia's biggest economy seeks to halt a further slide in the rupiah. Bank Indonesia's board of governors boosted the policy rate to 4.5 percent from 4.25 percent, a move predicted by a majority of analysts.  [The Standard]  

1. Industry News

• London Metal Exchange to launch yuan-denominated futures in sign of Chinese currency’s growing cachet. The London Metal Exchange is planning to introduce yuan-denominated metal products, according its chief executive, a sign the currency’s status in international finance is on the rise.  [SCMP]    
• China's new energy automakers dealing with subsidy cut. Over the past months, many NEV manufacturers in China have found themselves in an unfamiliar situation: sales continue to increase, but profits are significantly declining. In 1Q18, 143,000 NEVs were sold in China, up 154% vs. same period last year, according to MIIT.  [China Daily]     
• China banking on AI for innovation edge. China is stepping up the push to develop artificial intelligence in manufacturing to boost its productivity and inject new impetus into the country's economic growth, an official from the Ministry of Industry and Information Technology said.   [China Daily]     
• Corporate News
• Shanghai Pharma to Increase Stake in Techpool for $144mn. Shanghai Pharma agreed to buy 26.3% stake in Techpool from Takeda for $144m, Shanghai Pharma says in filing to Hong Kong stock exchange. After deal, Shanghai Pharma’s stake in Techpool to be increased to 67.1% from 40.8%.  [Bloomberg] 
• China’s Fosun Wants to Expand With American Tourism Acquisitions. Chinese conglomerate Fosun International Ltd. is looking to expand its foothold in North America’s tourism and leisure market through acquisitions, as the owner of Club Med SAS launches a new product line in China.  [Bloomberg] 
• China Southern Boosts America-Europe Flights to Challenge Rivals. China Southern Airlines Co. will boost flights to Europe and North America from the country’s top-tier cities to challenge the dominance of rival Air China Ltd.  [Bloomberg] 
• ZTE Has to Change Management for U.S. Reprieve, Kudlow Says. Chinese telecom company ZTE Corp. will have to change its management, including by possibly appointing new board members, to win a reprieve from U.S. sanctions that shut it off from key suppliers, the director of the White House National Economic Council said.  [Bloomberg] 
• China Metals Giant Pushes Further Into Africa in Bauxite Hunt. Aluminum Corp. of China Ltd.’s Hong Kong unit plans to invest as much as $164mn in the Boffa bauxite project in Guinea, which has a total cost of $706 million, Chalco said in an exchange filing.  [Bloomberg] 
• Melco, Premium in Talks for Stake in Philippine Casino Operator. Melco Resorts & Entertainment in preliminary discussions with Premium Leisure for potential stake in the Melco venture which operates the casino business of City of Dreams Manila.  [Bloomberg] 
• HNA Unloads Shares of South African Airline as Selloff Continues. HNA Group Co. sold all its shares in South African airline Comair Ltd., the latest disposal by the debt-laden Chinese conglomerate. Comair disclosed the sale in an exchange filing on Thursday, though the statement didn’t provide details about when the shares changed hands and at what price.  [Bloomberg]  
• Tianqi Agrees to Buy $4.1 Billion Stake in Lithium Giant SQM. Tianqi Lithium Corp. is set to become the second-biggest shareholder in giant Chilean lithium producer SQM as the Chinese company expands its global presence amid surging rechargeable-battery demand.  [Bloomberg]  
• German pharma giant Bayer’s polymer division goes big on e-commerce in China. Covestro, which was spun off from German drug maker Bayer in 2015, has launched two digital distribution channels to capture new customers and meet the needs of changing business procurement behaviours in China.  [SCMP] 
• Terry Gou, head of iPhone assembler Foxconn, downplays risk of US-China trade war. Terry Gou, chairman of the world’s largest contract electronics manufacturer, which makes most of the world’s iPhone’s at giant factories in mainland China, has a lot to lose if a trade war breaks out between Washington and Beijing.  [SCMP] 
• China Southern moves to new airport terminal in Guangzhou. China Southern Airlines, together with 11 other domestic and foreign carriers, moved Saturday to the newly opened Terminal 2 at Guangzhou Baiyun Int’l Airport. With the airport serving as its main hub, China Southern Airlines is expected to take up more than 90% of the passenger throughput at Terminal 2, serving 85,000 passengers with 600 flights on its first day at the terminal.  [China Daily]
• Baidu's Lu Qi to leave role as COO. China's internet search giant Baidu Inc announced Friday that Lu Qi will no longer serve as chief operating officer of the company starting in July 2018 due to personal and family reasons, but he will continue to serve as vice-chairman of the board of directors.  [China Daily]  
• China Unicom sets up unit in Xiongan New Area. China United Network Communications Group Co, the country's second-largest mobile carrier by subscribers, has established a new unit in the Xiongan New Area, as part of its broader push to help build it into a high-tech, smart area.  [China Daily]    
• China Longyuan Completes Issuance of RMB2B Short-term Debentures; Coupon Rate 3.79%. China Longyuan announced that it has completed the issuance of RMB2 billion ultra short-term debentures with a term of 70 days and a coupon rate of 3.79%.  [AAStocks]     
• Melco Int’l Dev may sell Phiippines subsidiary. Melco Int’l Development announced that representatives of Melco Resorts had preliminary discussions with representatives of Premium Leisure Corp. in relation to a potential transaction whereby PLC or its affiliated entities may become equity holders of Melco Resorts and Entertainment (Philippines) Corporation.  [AAStocks]