HPH Trust

HPH Trust: In 4M12, China’s container throughput growth moderated to 8.5% Y/Y from 11% in 2011. JPM says the sector’s near term outlook remains uncertain with mixed signals from two leading indicators - new export orders under China PMI vs the latest results from the Guangzhou Trade Fair. New export orders has allowed China’s PMI to stay above the 50-threshold for the third month in a row. China’s throughput and new export orders under the PMI have high correlation despite the time lag. On the other hand, the latest Canton Trade Fair indicates that trading activities are slowing down by 2% Y/Y with new orders from EU and US declining by 5.6% and 8.1%. JPM believes the sector will probably continue range bound trade. Tips HPHT at Overweight (TP US$0.95), says the trust remains its favourite pick, as yield plays normally outperform in a down market while its port operations are more resilient through the cycle.