India’s Reliance Industries Limited said it would stop processing Russian oil at part of its giant Jamnagar oil refinery as US sanctions force the company to shy away from dealings with Moscow https://t.co/oLVXbOyt10 ...

Ahmed al-Sharaa has met with U.S. President Donald Trump at the White House. The Syrian leader pledged to join a US led coalition to defeat the Islamic State. U.S. Secretary of State Marco Rubio has also suspended comprehensive sanctions on Syria for 180 days.Trump described al-Shara as a tough leader while hinting at further announcements could be coming soon. You can expect some announcements on Syria. We want to see Syria become a country that's very successful and I think this leader can do it.I really ...

Core Insights - The dollar strengthened due to rising oil prices and a weakening Japanese yen [1] - Oil prices increased due to supply disruption risks following U.S. sanctions on Russia's major oil companies, Rosneft and Lukoil [1] - The sanctions were a response to Russia's insufficient commitment to the peace process regarding the Ukraine conflict [1] - A planned meeting between President Trump and President Putin was canceled [1]

Core Points - Li Thet, executive director of FSM Holdings, resigned after being sanctioned by US authorities for alleged involvement in a Cambodian cyber-scam operation [1][3] - The US Department of the Treasury's Office of Foreign Assets Control (OFAC) linked Li to the Prince Group, identified as a transnational criminal organization involved in online scams, human trafficking, and money laundering [1][2] - FSM Holdings initiated an internal assessment and is seeking professional advice to ensure compliance with laws and regulations following the announcement [3][4] Company Overview - FSM Holdings, listed on the Hong Kong stock exchange since 2018, operates in precision sheet metal engineering and online mobile game development [6] - The company was incorporated in the Cayman Islands and has a market valuation of HK$435 million, with shares closing at HK$0.435 and nearly zero turnover [6][7] - FSM Holdings reported an unaudited loss of US$3.97 million in the first half of this year, a significant increase from a loss of US$413,000 in the same period last year [7] Regulatory Context - The US sanctioned a network of over 115 businesses affiliated with the Prince Group, with 11 registered in Hong Kong, most being offshore shell firms [5] - FSM Holdings itself was not included on the sanctions list, indicating a potential separation from the alleged criminal activities associated with the Prince Group [6]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: China State-Owned Enterprises (SOEs) - **Market Dynamics**: The sector has experienced strong compression due to a widening offshore/onshore yield differential, leading to increased demand for China USD bonds and reduced supply from Chinese issuers turning to cheaper onshore funding [1][4][20]. Core Insights - **Credit Ratings**: China SOEs' credit ratings are anchored to China's sovereign rating, which is rated A1/A+/A by Moody's/S&P/Fitch. The outlooks are negative/stable/stable, respectively. The improving fundamentals from SOE reforms provide comfort against fallen angel risks [1][4][39][45]. - **US Sanctions Risk**: The primary risk for China SOEs remains US sanctions, particularly for companies like CNOOC and ChemChina. However, strong demand from Chinese investors is expected to absorb any potential spread widening due to sanctions [1][4][57][63]. - **Investment Recommendations**: J.P. Morgan recommends selective investments in COSL '30s, SINOCH '31s, and CNOOC '32s, highlighting their suitability for investors seeking low-beta exposure to Asia credit [1][4][26]. Financial Metrics - **Spread Compression**: The JACI China single-A Corporate Index has seen its z-spread tighten from z+220 in late 2022 to z+109, indicating strong technical support in the market [4][26]. - **Yield Differential**: The yield differential between offshore and onshore bonds has widened to approximately 290 basis points as of September 2025, influencing demand dynamics [14][20]. - **Profitability Metrics**: The average net profit margin for China SOEs improved from 11% to 13% from 2021 to 2024, while return on equity (ROE) rose from 6% to 8% during the same period, reflecting improving fundamentals [48][50][55]. Additional Insights - **Supply and Demand Imbalance**: The demand for China USD credit has increased, particularly from Chinese banks, while supply has decreased due to higher offshore borrowing costs. This has led to a significant reduction in dollar bond issuance by Chinese issuers [15][20]. - **Regulatory Focus**: The Chinese government is emphasizing SOE efficiency, with new assessment criteria focusing on stable profit growth and improvements in R&D expenditure intensity and labor productivity [48][49]. - **Sanction Lists**: The US has established multiple sanction lists relevant to China SOEs, including the NS-CMIC and CMC lists, which impose various restrictions on investment and business operations [58][61]. Conclusion - The China SOE sector presents a complex landscape characterized by improving fundamentals, strong technical support, and significant risks from US sanctions. Investors are advised to approach the sector selectively, focusing on specific bonds that offer better relative value while being mindful of the broader geopolitical context.