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CSCI Morning News Circular - 20181018

1. Macro News

• China's September CPI up 2.5%, PPI up 3.6%. China's consumer inflation, measured by consumer price index, edged up in September, according to the National Bureau of Statistics on Tuesday. CPI growth reached 2.5 percent last month, up from 2.3 percent in August. It was the highest level in seven months.  [China Daily]
• New Zealand Inflation Rises Faster Than Expected; Currency Jumps. New Zealand inflation picked up in the 3Q amid higher fuel prices and construction costs. The currency rose. Prices gained 1.9% YoY, Statistics New Zealand said. That’s up from 1.5% in the 2Q and faster than the 1.7% median forecast of economists surveyed.  [Bloomberg]
• S. Govt Deficit Grew 17% in Fiscal 2018. The U.S. govt. ran its largest budget deficit in six years during the fiscal year that ended last month, an unusual development in a fast-growing economy and a sign that, so far at least, tax cuts have restrained govt. revenue gains. Deficit totaled $779bn, up 17% from $666bn in fiscal 2017, Treasury Dept. said.  [WSJ]     

1. Industry News   

• China Cuts U.S. Treasury Holdings for Third Straight Month. China’s holdings of U.S. Treasuries fell for a third consecutive month in August as the Asian nation struggles to prevent the yuan from weakening amid trade tensions with America. China’s ownership of U.S. bonds, bills and notes was $1.165tn, down from $1.171tn in July, according to data released by the Treasury Department on Tuesday.  [Bloomberg]
• Listed property developers see slower sales growth in Sept. Chinese listed property developers' sales grew in September but at a slower pace compared to the same period a year earlier, the China Securities Journal reported. As of Oct 14, 30 listed property developers have released their sales performances in September, with a total sales volume reaching 440.1bn yuan ($63.6bn), up 37% YoY, the journal said.  [China Daily]     
• China allocates 10b yuan to support inclusive finance. China has allocated a special fund of 10 billion yuan ($1.4 billion) to develop inclusive finance this year, the Ministry of Finance said. The amount rose 29.85 percent, or 2.3 billion yuan, from the level in 2017, according to a statement by the MOF.  [China Daily]     
• Corporate News
• Bitmain, Canaan and Ebang IPO plans snared by Trump’s tariffs on Chinese cryptocurrency mining gear. Chinese cryptocurrency mining hardware maker Bitmain is bracing for harder times as the China-US trade war shifts into high gear, with shipments to one of its overseas markets facing new tariffs since August 23.  [SCMP]
• Google CEO says China search engine would serve 99 per cent of queries, takes a swipe at Baidu. Google CEO Sundar Pichai publicly addressed his company’s plans to re-enter the Chinese market with a search and news-oriented product for the first time on Monday, saying such a service would be capable of serving 99 per cent of queries.  [SCMP]
• Shareholders who vetoed HNA unit’s sale of Beijing office building to China Vanke want ‘better deal’. Shareholders who rejected a plan by troubled HNA Group’s flagship airline to sell a Beijing office block as part of its efforts to reduce a mountain of debt said they are hoping for a better deal.  [SCMP]
• Ford seeks China boost with new cars and electric vehicle venture during trade war. Ford Motor is counting on the SUV, and a new electric car tie-up, to turn around its flagging fortunes in the world’s largest car market. The Territory model will be the first of several SUVs Ford is rolling out in China to win customers who are passing on the company’s ageing line-up amid a trade war that has further dented demand by boosting prices of imported models.  [SCMP]
• Temasek Is Said to Have Held Talks for Stake in China’s Anbang. Singapore’s state investment firm, Temasek Holdings Pte, has held talks with Chinese authorities about acquiring a stake in Anbang Insurance Group Co. as well as some of its assets.  [Bloomberg]
• Gaw Capital Is Said to Join $1.9 Billion Swire Office Tower Deal. Gaw Capital is in talks to join Henglilong Investments Ltd. in its HK$15b ($1.9b) acquisition of Swire Properties Ltd.’s Cityplaza Three and Cityplaza Four office buildings in Hong Kong.  [Bloomberg]
• IBM Wants its Cloud Services to Play Nice With Competitors. International Business Machines Corp. is pressing deeper into its strategy of making cloud services more compatible with competitors, rather than trying to force customers into its own walled garden.  [Bloomberg]
• Amazon Will `Continue to Support' Defense Department.com Inc. Chief Executive Officer Jeff Bezos said his company "will continue to support" the U.S.Defense Department, drawing a contrast with cloud-services rival Google, which has said it won’t seek some military contracts following protests from its employees.  [Bloomberg]
• Blackstone Said to Be Among Investors to Weigh GEMS Stake Sale. Blackstone Group LP and other investors in GEMS Education are weighing the sale of a 25 percent stake in the Dubai-based school operator after putting plans for an initial public offering on hold.  [Bloomberg]
• Ford Expects China Approval by Year-End for Electric-Car JV. Ford Motor Co. expects to get Chinese regulatory approval by the year-end for its third joint venture in the country that will make pure electric cars, helping the automaker relieve pressures from sales declines and meet government requirements for EV production.  [Bloomberg]
• CGN sets up 3rd offshore wind farm. Construction of the country's largest single offshore wind project, located off Nanpeng Island in Yangjiang, Guangdong province, kicked off on Monday. With a total installed capacity of 400 megawatts, the project is scheduled to connected to the grid and start generating power by 2020, with a yearly generation capacity of 1.47bn kilowatt hours, according to CGN New Energy Holdings Co Ltd.  [China Daily] 
• Microsoft Surface PCs get China debut. Microsoft Corp unveiled its most powerful Surface personal computing product series in China on Monday with a tailor-made new color option for local customers, as the US tech giant seeks to increase its popularity among female users.  [China Daily]
• Volkswagen delivers 3m vehicles in China in Jan-Sept. Volkswagen Group China, along with its two joint ventures in China - SAIC Volkswagen and FAW-Volkswagen - delivered a total of 3.04 million automobiles to the Chinese mainland and Hong Kong between January and September, up 50% YoY.  [China Daily]
• GM drives in China toward vision free of emissions, congestion. General Motors Co envisions a world free of emissions, crashes and congestion with its electric vehicles, autonomous driving and V2X technology. In its largest market of China, the US automaker said it is charging ahead on the path toward that vision, starting with its electrification efforts.  [China Daily]   
• CGN Power 9M18 Net Profit Down 14.5% YoY. CGN Power announced that in accordance with the PRC Accounting Standards for Business Enterprises, its net profit declined 15.38% yearly to RMB7.456bn for the nine months ended 30 September 2018. During the period, the company's net profit dropped 14.46% yearly to RMB7.388bn in accordance with the IFRSs.  [AAStocks]