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CSCI Morning News Circular - 20181203

1. Macro News     

• Trump, Xi Agree to Temporary Truce in Bid to Contain Trade War.S. President Donald Trump and Chinese President Xi Jinping agreed to keep their trade war from escalating with a promise to halt the imposition of new tariffs for 90 days as the world’s two largest economies negotiate a lasting agreement.  [Bloomberg] 
• China's manufacturing PMI edges down in November. The purchasing managers' index (PMI) for China's manufacturing sector came in at 50 this month, down from 50.2 in October, official data showed Friday. The purchasing managers' index for China's non-manufacturing sector came in at 53.4 in November, down from 53.9 in October.  [China Daily] 
• Japan’s Factory Output Surges in Sign of Rebound in Economy. Japan’s factory output expanded at its fastest pace in more than three-and-a-half years in October, offering evidence the economy is rebounding from a contraction in a disaster-struck third quarter.  [Bloomberg] 

1. Industry News   

• China Cuts Margin Requirement for Stock-Index Futures Trading. China sets 10% margin requirement for CSI300, SSE50 index futures and 15% for CSI500 contracts starting today (Monday, 3 Dec), China Financial Futures Exchange says. Transaction fee for closing same-day position will be cut to 0.046% from 0.069%.  [Bloomberg]
• China Tells Power Cos. to Boost Coal Buys under Long-Term Deals. Coal purchase by major power generators under mid- to long-term contracts should account for more than 75% of their overall purchase in 2019, according to statement from NDRC Friday. Purchase under longer-term contracts shouldn’t be lower than
  level in the previous year.  [Bloomberg]     
• China Is Said to Plan Purge of a $176 Billion Loan Market. China is preparing to end its $176 billion experiment with peer-to-peer lending. Alarmed by a surge in defaults, fraud and investor anger,Chinese authorities are planning to wind down small- and medium-sized P2P lending platforms nationwide.  [Bloomberg]     
• Corporate News
• Argentina Signs up China’s CRCC for $1.1 Billion Rail Overhaul. Initial phase involves upgrading 1,020km of the San Martin cargo line between Mendoza and the ports of Rosario and Buenos Aires, country’s transport ministry says in statement.  [Bloomberg]   
• Shimao Property Sells Hong Kong Office Floor for HK$1B. Shimao Property recently sold 38th floor of Lippo Centre Tower 1 in Admiralty for ~HK$1 billion, Ming Pao reports. The 18,085 sq ft property was sold at HK$55,294 per sq ft, a record for the building.  [Bloomberg]  
• Fosun Tourism Group’s HK IPO to Raise Up to $548m. Fosun Tourism Group plans to offer 214.2m shares at HK$15.60 to HK$20.00 apiece in a Hong Kong IPO, according to a prospectus distributed at a media briefing. Taobao China Holding, Shun Tak Hldgs and Suchuang Gas have agreed to buy shares in the offering as cornerstone investors.  [Bloomberg] 
• HNA Flagship Hainan Air Seeks $1.1 Billion Loan, Moves Officials. Hainan Airlines Holding Co. announced two of its top executives are leaving their posts and the company will apply for 7.5bn yuan ($1.1bn) of loans in the latest sign of stress at parent HNA Group Co., the indebted airline-turned-global acquirer.  [Bloomberg] 
• Kaisa Property Raises HK$328 Million From Hong Kong IPO. The property management unit of Kaisa Group has raised HK$328 million from a Hong Kong initial public offering after pricing it at the lower part of the range, IFR Asia reports.  [Bloomberg] 
• Baidu’s Video Site iQiyi Raises $650 Million in Convertible Deal. iQiyi Inc. has raised $650mn selling five-year convertible bonds. The company, backed by Chinese search giant Baidu Inc., priced the securities with a 3.75 percent coupon and a conversion premium of about 40 percent, according to a statement.  [Bloomberg] 
• Renault, Nissan and Mitsubishi Commit to Alliance in Wake of Ghosn Arrest. Renault SA, Nissan Motor Co. and Mitsubishi Motors Corp. affirmed support for their globe-spanning alliance as senior executives from the auto makers met formally for the first time since the arrest of Carlos Ghosn, the partnership’s prime architect.  [WSJ] 
• Great Wall Motor looks towards Europe with new electric vehicle brand - the Ora. Great Wall Motor, the mainland’s largest maker of sport-utility vehicles (SUVs), plans to make inroads into Europe with its electric vehicles in 2020, helped by a new brand expected to bolster its growth --known as Ora.  [SCMP]
• Club Med owner scales back Hong Kong IPO plan by nearly half amid downbeat mood. Fosun Tourism Group, owner of the French holiday resort chain Club Med, has cut the size of its Hong Kong IPO by almost half amid a slumping market and a surge in new share offerings. The company plans to raise as much as HK$4.28bn (US$547mn) by pricing 214.2mn shares to be sold at a range between HK$15.6 to HK$20 per share, it said in a statement.  [SCMP]     
• Chow Tai Fook reports operating profit up 24.7 per cent in fiscal half year. The company reported operating profit surged 24.7 per cent to HK$2.989 billion (US$382.09 million) for the six months ended September 30. Earnings per share amounted to 19 HK cents, while the jewellery chain will pay an interim dividend of 15 HK cents per share.  [SCMP]     
• Ant Financial names new president amid Alibaba management reshuffle. Ant Financial Services Group has appointed Simon Hu, former head of Alibaba Cloud, as its president, the latest follow-up in Alibaba’s organizational restructuring announced three days ago.  [China Daily]   
• China Southern Airlines, American Airlines to expand codeshare cooperation. China Southern Airlines and American Airlines have signed agreements to further expand the codeshare and other major business cooperation, announced China Southern Airlines.  [China Daily]  
• China Eastern expands fleet with next-generation Airbus. China Eastern Airlines took delivery of its first A350-900 airplane at the Shanghai Hongqiao International Airport on Friday, in its latest bid to capture flyers in the premium long-haul intercontinental flight market.  [China Daily]   
• CRRC to step up efforts in overseas markets. China Railway Rolling Stock Corp, manufacturer of locomotives and rolling stock, will continue to bank on localized manufacturing, procurement, employment, services and management to drive growth in markets related to the Belt and Road Initiative, a senior executive said on Friday.  [China Daily]   
• Fosun Tourism Plans 12 New Resorts until 2020; May Fare Better. Fosun Tourism Vice Chairman and Deputy CEO Henri Giscard d'Estaing said the company plans to increase 12 resorts until 2020, with four in China, two in North America, six in Europe and Africa. The company aims at opening one new resort each year in future.  [AAStocks]  
• Lenovo Rooted in PRC, Sees Intelligent Development Potential in PRC. Lenovo Group Chairman Yang Yuanqing stated that the group is an int’l company rooted in China, cited Chinese media. Not only does the company hope to sell Chinese products to the world, it also targets at developing its product by means of global resources.  [AAStocks]