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CSCI Morning News Circular - 20190226

1. Macro News     

• Trump Says He Expects to Sign a Trade Deal With China ‘fairly Soon’. President Trump stoked expectations Monday for a successful conclusion to U.S.-China trade talks, saying he anticipated signing an agreement with Chinese President Xi Jinping "fairly soon."  [Bloomberg]
• Euro-Area Core Inflation Rate Is Set to Remain Subdued. February readings for euro-area inflation are due on Friday, with economists predicting a slight uptick of the headline number to 1.5%, while they see the core rate stuck at 1.1%. The European Central Bank, which holds its next rate decision on March 7, has “grown more anxious about the influence on inflation of a prolonged economic slowdown,” according to .  [Bloomberg]
• Fed Embarks on a Rethink of Its Inflation Target. Federal Reserve officials are considering whether to allow inflation to rise above their 2% target more often as they grapple with the likelihood that interest rates are likely to remain much lower than in the past.  [WSJ]
• Fed’s Balance-Sheet Runoff Could End in Latter Half of 2019. Top Federal Reserve officials said the central bank could stop reducing Treasury holdings from its $4tn asset portfolio in the latter half of the year before keeping its holdings steady for some time to determine underlying demand for the central bank’s liabilities.  [WSJ]

1. Industry News                      

• CSRC to Ask Securities Cos to Enhance Unusual-Trade Monitoring. China’s securities regulator to ask securities companies to strictly implement suitability management of its brokerage and margin-financing customers, according to a statement posted on its website late Monday.  [Bloomberg] 
• NEV makers raise prices to offset drop in govt subsidy. As China is slow to release its subsidy-cutting scheme for 2019, some new energy carmakers have raised sticker prices to ensure their profit, but insiders expect that the prices of new energy vehicles will drop again eventually. The subsidy may drop as much as 50 percent from the previous year, which means 70,000 yuan ($10,450) less for one electric car sold, The Economic Observer reported.  [China Daily] 
• S.-China Said to Haggle Over How to Enforce Currency Pact. The U.S. and China haven’t yet agreed on the critical issue of enforcement in a proposed currency deal that would ensure Beijing lives up to its promise to not depreciate the yuan, four people familiar with the matter said.  [Bloomberg] 
• Corporate News5
• Ping An Is Said to Plan IPO of Fintech Unit at $8 Billion Value. Ping An Insurance (Group) Co., China’s largest insurer by market value, is gearing up for an initial public offering of its OneConnect unit that could value the financial management portal at about $8 billion, according to people familiar with the matter.  [Bloomberg]
• CNPC to Invest 54 Billion Yuan to Lift Chongqing Gas Production. China National Petroleum Corp.’s southwest unit plans to invest more than 54 billion yuan through 2025 to accelerate gas output in the Chongqing area, co. said. The unit plans to investment more than 100b yuan in gas development in Chongqing area from 2026 to 2035.  [Bloomberg]
• CNOOC Says Bozhong 19-6 Gas Field Geological Reserve >100BCM. Proven natural gas reserves at Bozhong 19-6 field in Bohai are more than 100b cubic meters, China National Offshore Oilfield Corp. says in a statement on Weibo Monday,citing data confirmed by the Ministry of Natural Resources.  [Bloomberg]
• China Minsheng Investment Forms Creditor Committee. A creditor committee has been set up to work out a debt resolution for China Minsheng Investment Group Corp.,the beleaguered private investment giant, according to the 21st Century Business Herald.  [Bloomberg]
• Renault Plans to Invest EU800m in Romania in Next 3 Years. Renault plans to continue investments in Romania, the home of its Dacia brand, while urging the government to speed up roadworks to upgrade the country’s infrastructure network, Ziarul Financiar newspaper reports, citing Christophe Dridi, CEO of the company’s Romanian unit. [Bloomberg]
• Ping An plans to raise about US$1bn in HK by spinning off its fintech unit OneConnect. Ping An Insurance (Group), China’s largest insurer by market value, is gearing up for an initial public offering of its OneConnect unit that could value the financial management portal at about US$8 billion, according to people familiar with the matter.   [SCMP]
• Chinese carmakers to seek global sales, fame. Chinese carmakers are stepping up their efforts to make forays into overseas markets in the hope of increasing their sales and bolstering their brand images amid fierce competition back home. Great Wall Motor is investing 10mn yuan ($1.49mn) to set up a subsidiary in India, the latest move to fulfill its ambition to become the world's largest SUV producer within five years.  [China Daily]
• Warren Buffett’s Berkshire Hathaway reports US$25b loss on paper. Warren Buffett’s company recorded a US$25bn loss in the 4Q because of a big drop in the paper value of several of its stock investments. Buffett said Berkshire Hathaway’s businesses are performing well overall, but it has to record the market value of its stock holdings at the end of each quarter and Buffett has struggled to find attractive acquisitions recently.  [The Standard]
• Sunny Optical 's Shr in Huawei Orders Rise 30% This Quarter. Huawei is boosting component inventory and expanding its supplier network, as the Nikkei quoted from inside sources. Sunny Optical and Largan Precision have reported 30% yearly increase in terms of orders from Huawei this quarter, as the cellphone manufacturer is trying to incorporate more advanced camera functions into its new models, said the report.  [AAStocks]
• SFC QoQ Loss $137M; Income at 7-quarter Low of $310M. Securities and Futures Commission unveiled its quarterly report ending 31 Dec-18. Income for the quarter was $312mn, the lowest over the past seven quarters. Investment loss amounted to $62.013mn. Together with expenses of $449 million, the company recorded 3Q loss of $137mn. [AAStocks]
• Huawei Welcomes Trump's Remarks on 5G Rivalry. Huawei has never allowed any cyber espionage through its equipment, and they will never allow so, reiterated Rotating Chairman Guo Ping at the opening ceremony of Mobile World Congress. Guo also voiced his support and welcome to President Trump's recent remarks that the US will excel at the mobile communication through competition instead of technology blockade.  [AAStocks]
• 1st ZTE 5G Flagship Phone Said to Unrolled in 1H1. China Unicom and ZTE. will launch the first ZTE 5G flagship smartphone "Axon 10 Pro" at the upcoming 2019 Mobile World Congress, Chinese media reported. The model is expected to be unrolled in Europe and China in the first half of 2019.  [AAStocks]
• Anta Sports AMER Sports Acquisition Approved by Mexico. Anta Sports announced that regarding the extension in the offer period of AMER SPORTS acquisition, the Offeror has received the necessary approval for the completion of the Tender Offer from the Federal Economic Competition Commission in Mexico.  [AAStocks]
• Xinyi Glass FY18 Net Profit Rises 5.6% to $4.24B, Final DPS 27 Cents. Xinyi Glass announced annual results ended December 2018. The net profit amounted to $4.237bn, up 5.6% yearly. EPS equaled 105.7 cents. Final DPS was 27 cents; full-year DPS totaled 52 cents.  [AAStocks]