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CSCI Morning News Circular - 20180531

1. Macro News

• Donald Trump to hit US$50bn of Chinese imports with 25% tariffs and restrict investment in US hi-tech industries. The US “will impose a 25% tariff on $50bn of goods imported from China containing industrially significant technology, including those related to ‘Made in China 2025’,” the White House said, referring to the Chinese government’s policy to support domestic development of strategic technologies.  [SCMP]   
• S. Officials Arrive in Beijing Ahead of Trade Talks. U.S. officials in Beijing ahead of trade talks scheduled for this weekend include USDA’s Ted McKinney,under sec. for trade and foreign agricultural affairs and USTR’s Chief Agricultural Negotiator Gregg Doud, according to State Dept statement.  [Bloomberg]   
• Japan’s Retail Sales Pick Up in April, Beating Expectations. Japan’s retail sales beat expectations in April following a dip in March, increasing more than forecasters predicted. Retail sales rose 1.4 percent in April (forecast +0.5 percent) from March, when they fell a revised 0.6 percent.  [Bloomberg]  

1. Industry News

• Canadian government to buy troubled Trans Mountain oil pipeline for US$3.5bn, stunning green critics. In an extraordinary move aimed at boosting Canada’s tar sands industry in the wake of sharp environmental opposition, the Canadian govt. said that it will spend C$4.5b to buy the Trans Mountain pipeline and triple its capacity.  [Bloomberg]     
• China’s central bank chief tamps down expectations of liberalising country’s financial industry. The PBOC Governor Yi Gang has sought to play down the expectations of a financial industry hankering for a faster pace of liberalisation, saying that whatever relaxation in regulations will have to be “gradual” and “steady.”  [Bloomberg]      
• Singapore, India Exchanges Are Said to Abandon Trade Link Talks. Singapore Exchange Ltd. and National Stock Exchange of India Ltd. have abandoned talks on a cross-border trading link. The companies couldn’t reach consensus on issues including timing, regulatory guidelines and the resources required for the project.  [Bloomberg]    
• Corporate News
• ZTE Among Suspended China A Shares Not Added to MSCI China Index. ZTE is among five securities that are suspended from trading as of May 30 and won’t be added to the MSCI China Index, according to MSCI statement on its website. The other four are: Beijing Orient Landscape & Environment,China Hainan Rubber Industry, China Railway Group and Shanxi Taigang Stainless Steel.  [Bloomberg]   
• China Southern Power Grid Sees Record Loading on May 24. China Southern Power Grid’s load reaches record 164m kilowatts on May 24, +0.9% from last year’s peak and +25.5% y/y, National Development and Reform Commission says on website.  [Bloomberg]
• Capital Group Companies Bought 13.3M Samsonite Shares May 25. The Capital Group Companies bought 13.3m Samsonite Intl on exchange at avg HK$26.9554 apiece May 25,according to a disclosure filing to Hong Kong stock exchange.  [Bloomberg]
• Tencent Music IPO Is Said to Possibly Value Company at $30B. Bankers expect that Tencent Music and Entertainment’s IPO will value the company in excess of $30b, FT reports. Valuation would depend in part on where Spotify was trading at the time of IPO pricing, the report cited one person as saying.  [Bloomberg]
• HNA Is Said to Sell San Francisco Tower to Northwood Investors. HNA Group Co. is continuing to whittle down its real estate holdings as it seeks to reduce its massive debt load. The company sold a San Francisco office tower, 123 Mission St., for about $300 million to Northwood Investors LLC.  [Bloomberg]   
• Tencent’s No Longer a Sure Bet as China Selling Nears $1 Billion. Traders in China are unwinding positions in Tencent Holdings Ltd. faster than ever, turning to other targets amid a lack of reasons to push Asia’s biggest stock any higher. Mainland investors sold a net $81 million worth of shares in the Chinese Internet giant through trading links with Hong Kong on Tuesday.  [Bloomberg]   
• Buffett Said to Have Offered Uber $3 Billion But Talks Died. Warren Buffett proposed investing $3 billion in Uber Technologies Inc. earlier this year, but the talks fell apart following disagreements over the terms and size of the deal, people familiar with the matter said. [Bloomberg]   
• Telecom Egypt Gets $200 Million Financing From Chinese Banks. Telecom Egypt sign $200 million long-term financing with Chinese financial institutions including Bank of China and China Export & Credit Insurance Corp., according to a statement.  [Bloomberg]   
• Country Garden Declares Special Dividend Linked to Spinoff. Country Garden board declares conditional special dividend of one Country Garden Services Holdings Co. share for every 8.7 shares held, according to statement to Hong Kong stock exchange.  [Bloomberg]   
• Country Garden Reports Adjustment to Conversion Price of Bonds. Country Garden says in a statement on the Hong Kong Stock Exchange the conversion price of the bonds will be adjusted from HK$20.556/share to HK$20.15/share with effect from May 28 as a result of the payment of the final dividend.  [Bloomberg]   
• Country Garden to Adjust Usage of Proceeds on 20b Yuan Bond. Country Garden’s 20b yuan onshore bond sale was suspended because it plans to adjust the use of its proceeds before going ahead with the sale, an investor relations officer says in an email in response to queries from Bloomberg.  [Bloomberg]   
• HNA’s Hong Kong Airlines Is Said to Consider IPO. HNA Group’s Hong Kong Airlines is considering an IPO in the short to medium term, Reuters reports. The co. seeks to raise c.$350m by selling new shares ahead of planned listing. It also wants to raise c.$550m via convertible bonds or tradable bonds before listing.  [Bloomberg]   
• HNA’s Spanish Hotelier Stake Is Said to Draw Elliott, Apollo. HNA Group Co.’s stake in Spanish hospitality provider NH Hotel Group SA has attracted interest from potential bidders including Elliott Management Corp. and Apollo Global Management LLC.  [Bloomberg]   
• Wanda and Tencent team up on ‘smart retail’ venture. Tencent Holdings has launched an internet technology joint venture with Wanda Commercial Management Group, the country’s largest owner and operator of shopping centres, upping its ante in becoming a “smart” retailer, very much in line with Alibaba Group Holding’s push to integrate its online and bricks-and-mortar resources.  [SCMP]   
• Agile Seizes Residential Land in Shantou, Guangdong at RMB1.11B. Agile Group announced that it seized a residential land in Shantou City, Guangdong Province at RMB1.11bn with a land area of 78,000 sq.m.. Mgmt said the acquired land will be developed into a production base of national knitted underwear with tremendous potential.   [AAStocks]