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CSCI Morning News Circular - 20190604

1. Macro News     

• Malaysian exports unexpectedly rise in April. Exports from Malaysia to the U.S. edged up in April, snapping two prior months of declines, boosted by higher shipments of manufactured and electrical goods. Data released by Malaysia’s statistics agency showed that the value of exports rose by 1.1% during the month, vs. a fall of 0.5% in March.  [FT]     
• Indian factory output speeds up despite economic headwinds. India’s manufacturing industry grew at its fastest rate in three months in May, bucking recent signs of a broader slowdown. The latest Nikkei India purchasing manager’s index showed an uptick to 52.7 for the month, compared to 51.8 in April.  [FT]     
• S. Inflation Shows Signs of Life in April. U.S. inflation picked up in April after a weak start to the year. The Fed’s preferred inflation gauge, the price index for personal-consumption expenditures, rose a seasonally adjusted 0.31% in April from March, its largest monthly gain since Jan 2018.  [WSJ]      

1. Industry News                       

• MIIT To Issue 5G Commercial Licences Shortly. Ministry of Industry and Information Technology will issue 5G commercial licences in short term as China is stepping into 5G commercial era, as Xinhua News Agency learnt from MIIT.  During the experiment stage, foreign tech giants, such as Nokia, Ericsson, Qualcomm and Intel, had deeply contributed to 5G development.   [AAStocks]     
• Oil Talks Start in Norway as Strike Could Cut Production by 11%. Norway is facing the risk of a strike that would cut output by 11%. A managers’ union face employers in state-backed mediation on Monday to try to reach an deal. If they fail to agree by midnight deadline, c.200 workers will walk out at platforms operated by cos incl. state-controlled giant Equinor ASA. About 440K barrels of daily oil and gas output would be halted.  [Bloomberg]          
• Guangdong puts plan in place to stimulate vehicle purchases. Guangdong province in South China is to relax its restrictions on purchasing vehicles in the cities of Guangzhou and Shenzhen to boost car sales and industry insiders are calling for other cities with similar rules to follow suit.  [China Daily]     
• Corporate News
• Real estate developers slammed after China reportedly tightens access to bond market funding. Shares of Chinese real estate developers were under pressure on Monday after reports that regulators plan to restrict access to funding through the bond market.  [SCMP]
• Blackstone buys logistics assets from Singapore’s GLP for record US$18.7 billion. Private equity giant Blackstone has agreed to buy US$18.7 billion worth of assets from Singapore logistics firm GLP in a deal that is touted to be the largest private real-estate transaction ever, and a vote of confidence in the future of online retailing.  [SCMP]
• France Presses for Concessions From Fiat in Renault Proposal. The French government, Renault SA’s biggest shareholder, wants additional guarantees from Fiat Chrysler Automobiles NV in its proposal to merge the two carmakers as it seeks to avoid job cuts in France and protect national interests.  [Bloomberg]      
• Embattled Huawei to Exit Undersea Cable Business Amid Trump Ban. Huawei Technologies Co. is selling its majority slice of its global submarine cable division, exiting the business of laying undersea piping for the internet just weeks after the Trump administration blocked it from buying American technology. Huawei’s corporate parent is selling its 51% of Huawei Marine Networks to Hengtong Optic-Electric Co., a Jiangsu-based optical-cable manufacturer.  [Bloomberg]      
• Deutsche Bank, UniCredit Start Brexit Swaps Move Out of London. Deutsche Bank AG and UniCredit SpA moved some of their swaps trades from London to Frankfurt in May as banks used a lull in the ongoing Brexit drama to prepare for the worst.  [Bloomberg]      
• China Tobacco Prices HK$813m IPO at Top, IFR Asia Reports. China Tobacco International raised HK$813 million after pricing at the top of the indicative price range, IFR Asia reported. Margin Loans for China Tobacco Intl IPO 35x Oversubscribed.  [Bloomberg]      
• Baoshang Bank Plans to Sell New NCDs After Takeover By PBOC. Baoshang Bank is selling the first negotiable certificate of deposit Monday after it was taken over by Chinese regulators on May 24, according to a filling issued on Friday on Chinamoney. The bank plans to sell 1b yuan of NCDs, and the price is 98.4 yuan on a face value of 100.  [Bloomberg]      
• China’s Unionpay to Offer Debit, Credit Cards in Europe. UnionPay partnered with Tribe Payments to allow banks and fintechs to begin offering individuals and companies its branded cards from June, Financial Times reports, citing comments from Tribe's founder.  [Bloomberg]      
• Macquarie Tops Prior Bid for KCOM With $712 Million Offer. A fund owned by Macquarie Group Ltd. topped a previous offer for KCOM Group Plc with an agreement to pay 563 million pounds ($712 million) in cash for the U.K. regional phone company.  [Bloomberg]      
• Bank of Jinzhou Auditors Find Inconsistencies in Loan Documents. Bank of Jinzhou Co.’s auditors resigned from their role, the Chinese bank said in a statement. Ernst & Young Hua Ming LLP and Ernst & Young said in a resignation letter to the bank that there are indications that the proceeds of some loans to institutional customers weren’t consistent with the purposes stated in documents, Bank of Jinzhou said.  [Bloomberg]  
• CTIHK Priced Near Upper End of Offer Price Range, Retail Over-subscription of Over 100x. CTIHK priced its stock close to the upper end of the original offer price range ($3.88-4.88), according to consolidated IFR sources. Retail investors over-subscribed the stock by over 100 times.   [AAStocks]    
• Xiaomi-W Founder Lei Jun Earlier Granted 79.1M B Shrs by Shunwei Ventures. Xiaomi-W’s founder Lei Jun reported that he was granted 79.098 million B shares of the company last Monday (27 May), as revealed by the interest disclosure of the Stock Exchange.  [AAStocks]    
• Foxconn Suspends Production Lines for Huawei Handsets. Foxconn's electronic product manufacturer in Shenzhen has suspended production lines for Huawei's handsets for days, South China Morning Post cited people with the knowledge of the matter.  [AAStocks]
• Xiaomi brings smart and affordable consumer technology to Chile. The first physical store of Chinese electronics company Xiaomi in South America opened in the Chilean capital in late April and is offering its more than 25,000 Chilean followers new technologies at affordable prices.  [China Daily]     
• Ineos to build Saudi plants in $2bn investment. Ineos is to spend $2bn building three chemical plants in Saudi Arabia, heralding the first investment in the Middle East by the business controlled by British billionaire Jim Ratcliffe. The privately-owned group will conduct at a vast petrochemicals complex being developed in the oil-rich kingdom.  [FT]