HPH Trust

HPH Trust: DB highlighted that while the Shanghai Free Trade Zone (SHFTZ) will have a negative influence on throughput volumes for Hong Kong ports, the impac appears to be insignificant. In a worst case, HK might see a 15% reduction in throughput over time. The Chinese government has stated that SHFTZ is a pilot program and the ultimate purpose is to replicate its successful experience in other areas. This suggests that China is moving towards the Transpacific Partnership (TPP). As the TPP is aiming to reduce import tariffs on most goods to zero and remove non-tariff trade barriers, China’s entry into the TPP would boost its exports to economies that account for 40% of global GDP. If materialized, both ports and shipping would benefit, as China’s entry into the TPP would lift volume prospects in the long run. DB remain positive on Chinese ports and container shipping as G3 recovery should lead to strong Asian exports in the near term. DB has a Buy rating on HPH Trust with TP of US$0.83.