Morning Wrap by Decoder – 18 Feb 14

• SG: GLP SP – Received fresh capital of $2.5bn from Chinese investor consortium to invest in their business in China. With this transaction, GLP’s effective stake in the China assets will be reduced from 100% to 66%. Separately, the GLP group also announced a US$163mn private placement to the Chinese consortium with 74mn shares priced @ $2.755/share, representing a 4.4% discount to 18 Feb’s price. This placement represents 1.5% of the outstanding share capital of GLP on a fully diluted basis. Out of the $2.5bn, 1.6bn will be disbursed within the next week months and the remaining will be given 12 months from now. With the new capital, GLP will have sufficient firepower for monetizing land reserves and the consortium will serve as a strategic partner to establish new relationships and opportunities given their deep linkages in China.

• HK/CN (China Galaxy):

1. PBOC conducted repo in the open market yesterday withdrawing 48bn yuan funds.

2. Premier Li Keqiang: The economic system reform has to deeply adjust the interest relationship.

3. The reform plan for State-owned Enterprises has been submitted. The plan is expected to be launched after NPC & CPPCC, two important meetings of Chinese government.

4. CSRC declares the IPO registration mechanism reform schedule will not be changed.

5. First-batch private bank licenses are estimated to be granted soon. The regulations on financial reform will be issued in the near future.

6. MOC: China FDI in January is 10.763 billion USD, rising 16.11% y/y.

7. 12.06 billion Yuan fund inflow was observed in the A-share market during previous trading day.

• US stocks were sluggish after the long weekend break on Monday. However, Nasdaq was resilient and continued to make recent highs to hit level not seen since the Tech bubble back in 2000. Economic data were WTE which added on to the weakness in the markets. Feb Empire mfg came in below @ 4.48 Vs 8.5 while Feb NAHB Housing market index slipped to 46 Vs consensus of 56. Vol was a bit below average @ 709m shares traded @ NYSE.


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