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CSCI Morning News Circular - 20181114

1. Macro News

• Tax, fee reductions in pipeline. China will continue to reduce taxes and fees, maintaining fiscal expenditure at a relatively high level to back the private sector and stabilize economic growth, Finance Minister Liu Kun said. "The Finance Ministry will continually study and implement tax cuts of a larger scale and more significant fee reduction for companies, to better promote the healthy development of the real economy," he said in an article.  [China Daily] 
• Bank of Japan’s Hoard of Assets Is Now Bigger Than the Economy. The Bank of Japan’s massive asset purchase program has taken it into uncharted territory, with its ballooning holdings now larger than the country’s annual economic output. Its holding reached a staggering 553.6tn yen, vs. nominal GDP of 552.8tn yen at end-Jun.  [Bloomberg]              
• China Seen Challenging EU as Biggest Natural Gas Buyer by 2040. China, the driver of global demand, is forecast to become the world’s largest gas-buying country with net imports approaching the level of the European Union by 2040, according to the International Energy Agency’s the World Energy Outlook.  [Bloomberg]      

1. Industry News   

• China's mobile phone shipments edge up 0.9% in October. China's mobile phone shipments grew 0.9 percent year-on-year to 38.53mn units in Oct, ending a four-month decline streak, according to a report. Total shipments during the January-October period reached 343mn units, down 15.3% YoY, CAICT said in its report.  [China Daily]         
• PBOC to Further Promote Bank Account Mgmt Reform. PBOC Deputy Governor Fan Yifei says the Chinese central bank will further promote reform of bank account management Xinhua reports. PBOC aims to enhance ability to provide payment and settlement services to private enterprises, and small and micro businesses.  [Bloomberg]         
• MSCI May Drop Walmart Supplier From Its Indexes in Review. MSCI Inc. will announce the results from its semi-annual review on Nov. 13, and Walmart Inc. supplier Li & Fung Ltd. may be on the chopping block. The company’s market cap has slumped to $1.76bn, well below the $3.19bn minimum required for MSCI’s developed-market gauges. [Bloomberg]   
• Corporate News
• Fosun Tourism Gets Listing Approval From Hong Kong Bourse. Fosun Tourism Group has received approval for initial public offering that’s expected to raise up to $1 billion, the South China Morning Posts reports, citing an unidentified person familiar with the deal.  [Bloomberg]   
• Innovent Biologics Says China Accepts Arthritis Drug Application. China National Medical Products Administration has accepted new drug application for its adalimumab biosimilar, an antibody solely for the treatment of ankylosing spondylitis, rheumatoid arthritis and psoriasis, Innovent Biologics said in statement to HK stock exchange.  [Bloomberg]   
• Tongcheng-Elong Seeks to Raise $232M in Hong Kong IPO. Tongcheng-Elong offers 143.8m shares at HK$9.75–HK$12.65 apiece in Hong Kong initial public offering,according to terms for the deal obtained by Bloomberg. Trading expected to begin Nov. 26.  [Bloomberg]
• China’s Sinopec to Raise Winter Gas Supply by 18% to 18.2 BCM. Sinopec plans to boost natural gas supply by 18% this winter to 18.2 billion cubic meters from a year earlier, co. says in emailed statement.The company plans to increase gas supply to seven northern provinces and cities including Beijing and Tianjin by 29%.  [Bloomberg]
• CapitaLand Fund in JV w/ GIC to Buy Shanghai Towers for S$2.54b. CapitaLand, through Raffles City China Investment Partners III, has formed a joint venture with Singapore’s GIC to acquire Shanghai’s tallest twin towers for RMB12.8 billion, or about S$2.54 billion, according to SGX filing.  [Bloomberg]
• Chinese Luxury Giant to Slow M&A After $4 Billion Overseas Spree. Ruyi Holding Group, the Chinese apparel firm that agreed in February to buy control of Bally International AG, will slow its dealmaking after announcing more than $4 billion of overseas acquisitions in the past three years.  [Bloomberg]
• HNA’s Container Lessor Is Said to Attract Orix, Ontario Teachers. HNA Group Co.’s sale of container-leasing business Seaco has attracted potential bidders including Japanese financial firm Orix Corp. and Bermuda-based Triton International Ltd. Seaco has also drawn preliminary interest from investment funds including Ontario Teachers’ Pension Plan, which owns rival lessor SeaCube Container Leasing Ltd.  [Bloomberg]
• BMW Is Said to Hold Sale Talks for Its Branded Credit-Card Unit. BMW AG may be getting out of the credit-card business. The world’s second-biggest luxury carmaker has held talks with banks as it considers a sale of its credit-card portfolio.  [Bloomberg]
• Bank of China to Sell Bonds to Fund Greater Bay Area Development. Bank of China Ltd. is marketing its first offshore bond that backs projects in the Greater Bay Area covering Hong Kong, Macau and mainland China. Proceeds will be used to back infrastructure projects including the Hong Kong-Zhuhai-Macau bridge, investments for the private sector and corporate cross-border finance projects. [Bloomberg]
• Skoda looks to double up its share of the Chinese market. Skoda Auto aims to grasp a larger share of the Chinese market, backed by the automaker's "Simply Clever" solutions. "At present, Skoda accounts for 1.6 to 1.7% of the Chinese auto market, which is not enough. Our goal is to double that," said Bernhard Maier, CEO of Skoda Auto.[China Daily]         
• HSBC Stages Comeback to Brazilian Mkt, May Hire 200 More Staff. HSBC Holdings set to return to Brazilian market, plans to increase the number of staff at the local investment banking unit to 200 or above from about 80 currently to facilitate the growth recovery plan as raised by CEO John Flint, Financial Times said.  [AAStocks]
• FTSE Russell Plans to Include CN Bond Mkt into Index. FTSE Russell is in talks with related departments about including Chinese bond market into its index, with a hope that the inclusion criteria can be laid out as soon as possible, China Securities Journal cited the responsible person of FTSE Russell.   [AAStocks]
• China Resources Power Oct Subsidiary Power Generation Up 6.9% YoY. China Resources Power announced that total net generation of subsidiary power plants in Oct-18 increased by 6.9% yearly to 10,501,500 MWh. Total net generation of subsidiary power plants for the first ten months of 2018 increased by 3% yearly to 130,000,000 MWh.  [AAStocks]
• VTech interim falls to US$90m. VTech reported a 13 percent decline in interim net profit to US$90.1 million (HK$702.7 million) from US$103.6 million in the same period last year, due to the overall weak performance of the group's telecommunication products.  [The Standard]
• Cathay defends delay in data-leak report. Cathay Pacific claims it was only able to report a data leak affecting 9.4 mn passengers 7 months after it first occurred as it was focused on combating cyberattacks that lasted three months. The airline explained in a paper to lawmakers yesterday why it only announced the leak last month even though its system had been attacked since March.  [The Standard]