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CSCI Morning News Circular - 20181101

1. Macro News

• China Feels Trade War Pain as Export Gauge Signals Worse to Come. The first official gauge of China’s economy in October showed manufacturing activity continued to worsen. The manufacturing purchasing managers index fell to 50.2 this month, lower than projected in a Bloomberg survey of forecasters.  [Bloomberg]     
• Australia’s Core Inflation Weaker Than Forecast in Third Quarter. Australia’s annual core inflation was weaker than forecast in the three months through September, suggesting the central bank’s prolonged interest-rate pause has further to run. Quarterly trimmed-mean inflation, the key core measure, rose 0.4% vs an estimated 0.4%; annual trimmed mean advanced 1.8% vs a forecast 1.9%.  [Bloomberg]     
• India Seeks to Ease RBI Standoff After Citing Never-Used Power. India sought to defuse growing tensions with its central bank following reports that the government had cited a never-used legal provision in trying to resolve disagreements with the monetary authority.  [Bloomberg]     

1. Industry News   

• PBOC’s First Bill Sale in HK Can Lend Support to Yuan. The PBOC plans to sell bills in Hong Kong for the first time on Nov. 7, an attempt to improve the yield curve in the offshore yuan center. To give a sense for the scale of the bill sale (it isn’t big),it will be a total of 20bn yuan, vs 618bn yuan of yuan deposits in HK as of end- Aug, according to HKMA.[Bloomberg]  
• BoJ Keeps Monetary Policy Unchanged, Lowers GDP Forecast. Bank of Japan decided to keep interest rate unchanged at -0.1% on 7 votes to 2 votes, while 10-year national note yield rate target was maintained at 0. The bank also lowered FY18 GDP forecast. The growth estimate median is now 1.4%, vs. 1.5% in previous estimate in July.[AAStocks]  
• Coal consumption posts strong growth on back of power generation demand. China's energy consumption experienced continuous rebound during the first three quarters in 2018. Coal consumed in electricity, steel, chemicals and construction material industries all increased, according to preliminary statistics, and coal used to produce electricity took up 53.9% of the total coal consumed during the period, about 2.3ppts YoY higher.  [China Daily]      
• Corporate News
• Standard Chartered profit rises 35pc in the third quarter, boosting CEO’s turnaround plan. Standard Chartered said on Wednesday that its earnings rose 35 per cent in the third quarter, providing ammunition to chief executive Bill Winters as he seeks to defend his turnaround plan amid rising investor frustration over the bank’s performance.  [SCMP]     
• Wanda offloads tourism assets. Sunac China Holdings Ltd, the Chinese mainland's fourth-largest developer by sales, said it will invest 6.28 billion yuan ($902mn) to acquire all the design, construction and management companies under Wanda Culture Travel Innovation Group.  [China Daily]     
• HNA Seeks to Sell 60% Stake in Lucky Air to China Eastern. HNA seeks to sell 60% stake in Lucky Air to China Eastern; plans to divest remaining 40% to state-owned asset regulator Yunnan Sasac, FT reports, citing unidentified former owners of the carrier who oppose the sale.  [Bloomberg] 
• Baidu Sees Hit From China Slowdown as Forecast Trails Estimates. Baidu Inc. predicted sales below analyst estimates as the Chinese search giant warned about a potential hit from regulatory changes, a slowing economy and the overhaul of its medical ads business.  [Bloomberg] 
• HNA Is Said to Try Offloading Airbus Planes to Leasing Firms. HNA Group Co. has been trying for months to offload passenger planes it ordered from Airbus SE. The Chinese group asked the leasing arms of Industrial & Commercial Bank of China Ltd. and China Minsheng Banking Corp.,among others, to take over at least 10 of HNA’s plane orders.  [Bloomberg] 
• StanChart CEO Bill Winters Eyes Fresh Plan to Revive Returns. Standard Chartered Plc is working on a three-year plan to improve profitability as a share slump this year puts pressure on the emerging markets lender to boost returns. The bank said on Wednesday that the bank will present its strategy in February to improve “financial returns” after the stock dropped by almost a third in 2018.  [Bloomberg] 
• ICBC to Work With China Bond Insurance to Help Private Firms. Industrial & Commercial Bank of China will team up with China Bond Insurance Co. as the lender explores ways to ease refinancing difficulties of privately-owned firms.  [Bloomberg]     
• MGM China Third Quarter Adjusted Ebitda HK$1.12 Bln. MGM China reported adjusted Ebitda for the third quarter of HK$1.12 billion. 3Q revenue HK$4.75 billion. 9M revenue HK$13.82 billion. 9M adjusted Ebitda HK$3.42 billion.  [Bloomberg]   
• Bank of China, 13 Philippine Banks Agree on Peso-Yuan Trading. Bank of China and 13 Philippine banks signed a memorandum of agreement to facilitate direct foreign exchange trading of Chinese renminbi and Philippine peso, Bank of China says statement.  [Bloomberg]   
• Baidu Sales Forecast Misses Estimates as China’s Economy Slows. Baidu Inc. forecast revenue that fell short of analysts’ estimates amid fears that China’s slowing economy and a looming trade war could hit consumer spending and advertising sales.  [Bloomberg]   
• Midea Sales Trail Estimates as Slowdown in Chinese Economy Hits. Midea Group Co., the world’s largest appliance maker, reported quarterly sales that were worse-than-expected amid a slowing Chinese economy and weakening property demand.  [Bloomberg]   
• Sinopec’s Mixed Bag of Results Show Oil Rally Denting Margins. China Petroleum & Chemical Corp.’s earnings growth may be losing momentum as the oil rally that has aided its upstream business also challenges the world’s largest refiner’s profits from processing crude into fuels.  [Bloomberg]   
• Standchart Reportedly Involves in Iran-related Probe Again; Admits Liaison with Regulators. Standard Chartered was said to be involved in investigations related to Iran of late again. CEO Bill Winters said there was no information that could be disclosed at this moment and mentioned only the bank was in touch with regulators for a constructive dialogue.  [AAStocks]     
• BYD Company to Develop US, African Mkt Together with German PV Co. Germany-based MA Solar Technology AG announced a strategic global partnership with BYD Company. Both companies will now expand the partnership to jointly address additional markets with a high growth potential such as the US and African markets. Collaboration will cover solar power storage and sales.  [AAStocks]     
• R&F Properties reported 1-3Q Net Profit Up 66.7% Year on Year to RMB4.5 Billion. R&F Properties announced that the net profit rose 66.7% yearly to RMB4.504 billion for the first three quarters ended 30 September 2018. The EPS was RMB1.39.  [AAStocks]