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CSCI Morning News Circular - 20180629

1. Macro News

• Fed Test Slaps Wall Street Titans While Unleashing Record Payout. Tougher Federal Reserve stress tests forced some of Wall Street’s top banks to rein in ambitious plans for pumping out cash to shareholders. But even those diminished returns spell a record payout to investors.  [Bloomberg]       
• China Slowdown Deepens on Trade Tensions and Weak Credit Growth. China’s expansion looks to have slowed further this month. A sharp deceleration in credit expansion may have weighed on the economy, according to Fielding Chen at Bloomberg Economics, who aggregates the earliest available indicators into one reading.  [Bloomberg]       
• China Takes New Steps to Curb Builders’ Access to Foreign Debt. China is tightening the screws by limiting the use of proceeds from builders’ overseas bond sales to just refinancing, dealing another blow to developers already struggling for funds.  [Bloomberg]  

1. Industry News

• China’s NDRC Is Said to Consider Banning 364-Day USD Bond Sale. China’s National Development & Reform Council is considering a ban on sales of dollar bonds with tenors of less than one year. NDRC is also said to be restricting offshore bond issuance quotas for Chinese corporates. SMEs and issuers raising funds for the one belt one road or green/sustainable projects would be prioritized for receiving issuance quotas.  [Bloomberg]        
• US steel association files lawsuit challenging constitutionality of Section 232 steel tariffs. The American Institute for International Steel on Wednesday filed a suit at the US Court of Int’l Trade challenging the constitutionality of the so-called Section 232 under which President Donald Trump imposed a 25 percent tariff on imported steel. [China Daily]        
• Interest in belt and road projects remains huge, but investors demand better risk management. There is tremendous interest in belt and road infrastructure projects, but investors are demanding stringent risk management measures to safeguard their investment against political and currency risks, according to a senior HSBC executive.  [SCMP]      
• Corporate News
• ZTE shareholders meet to vote on changes that clear the way for US ban to be lifted. Shareholders of ZTE Corp will gather Friday at the Shenzhen headquarters of the Chinese telecoms equipment maker to approve sweeping governance changes, as part of conditions to be met before the US Commerce Dept. will lift a ban that cut off the supply of crucial American technology to the company.  [SCMP] 
• China Tower gets green light for its US$10bn HK IPO, surpassing Xiaomi’s plan. China Tower, world’s biggest operator of telecommunications towers for mobile phone networks, has received the formal approval to raise up to US$10bn in a HK stock offer, surpassing smartphone maker Xiaomi in claiming the 2018 crown for the biggest global IPO.  [SCMP]      
• Xiaomi Flotation Fails to Impress Investors. Xiaomi Corp has received a lukewarm response to its USD6.1bn stock offer, in a sign that Hong Kong’s 10-month frenzy over get-rich-quick investments is fizzling out. The company received 109,446 applications for 1.03 billion shares at the end of a four-day offer period, with the retail subscription overbought by 8.5 times compared with the 109mn shares available to retail investors.  [SCMP]      
• Huawei hits back over probe call on US research pacts. The rotating chairman of Huawei Technologies has slammed U.S. Senator Marco Rubio and other US lawmakers for their campaign to have the telecommunications equipment and smartphone maker’s research partnerships and relationships with US universities investigated on national security grounds, calling them “ignorant”.  [SCMP]       
• Apple, Samsung resolve smartphone design fight after 7 years. Apple Inc. and Samsung Electronics Co. reached a settlement in their US patent battle, ending a 7yr fight over smartphone designs that spanned the globe. The litigation battle cost each co. hundreds of millions of dollars in legal fees and tested their reputations for innovation.  [SCMP] 
• Apple Is Said to Get Second Supplier for OLED iPhone Screens. Apple Inc. will soon land a second supplier for the organic light-emitting diode screens used in high-end iPhones, according to people familiar with the matter, a key step in the U.S. company’s push to reduce iPhone costs and its dependence on Samsung Electronics Co.  [Bloomberg]
• Sunac China CEO Bought HK$19.3M Shares Wednesday. CEO Wang Mengde bought 750,000 shares at avg. c.HK$25.7191 each on June 27, raising his stake to 0.43% from 0.41%, according to disclosure filing to Hong Kong stock exchange.  [Bloomberg]   
• Rusal Says Doing Everything Needed to Lift Sanctions Threat. United Co. Rusal is doing everything it can to avoid punitive U.S. restrictions due for full enforcement in October, according to the Russian aluminum giant’s acting Chief Executive Officer Evgeny Nikitin.  [Bloomberg]   
• Volvo Cars’ Billionaire Owner Says Trade War to Hit His Brands. Volvo Car Group’s billionaire owner warned of the looming trade war’s adverse effects, saying consumers and automakers such as his will be among those hurt by the dispute involving the U.S. and China.  [Bloomberg]   
• BYD opens battery plant in Qinghai. Chinese automaker BYD Co unveiled on Wednesday a new battery production plant for electric vehicles, and said the unit would be the largest of its kind in the world after it achieves full capacity in 2019. The factory will start full operation next year, with an annual capacity of 24 gigawatt-hours.  [China Daily]
• China Unicom partnering up for 5G research. China Unicom set up a string of 5G laboratories with partners including Tencent Holdings Ltd and Baidu Inc on Thursday to accelerate progress for its fifth-generation mobile communication technology.  [China Daily]          
• Chinese dairy brand climbs up global rankings. Yili has jumped five places to No 3 in a ranking of the world's top 50 food brands released by Brand Finance. Yili is the only Chinese brand in the 2018 Food and Drink report's top 10 global list, moving up from No 8 in 2017, following 43% YoY growth to hit $6.2bn in brand value.  [China Daily]  
• Huawei to build big data park in Qinghai. Huawei will work with northwestern Qinghai province to build a big data park for the clean energy industry in the plateau region. The big data park in Hainan Tibetan autonomous prefecture will become Huawei's 33rd cloud services spot across the country, said Zhang Xitao.  [China Daily]        
• Qilu Expressway (01576.HK) to Start IPO; Entry Fee $3,131. Qilu Expressway will start IPO today until 9 July 2018. The offer prices range $2.5-3.1. Entry fee is $3,131.24 with a board lot size of 1,000 shares. The stock will be listed from 29 July.   [AAStocks]  
• Nokia, Tencent Set up 5G Joint Laboratory. Nokia executed a strategic cooperation framework agreement with Tencent to establish a 5G joint laboratory. The two parties will build a 5G end-to-end experimental environment, in order to create typical application system and services for fields like "Cloud Games" and IoC in the laboratory.  [AAStocks] 
• Country Garden Buys Back 8M Shares at $102 Million. Country Garden announced that it repurchased 8 million shares through the Stock Exchange on 27 June, involving $102 million.  [AAStocks]