SINGAPORE (July 14): OCBC has maintained its “hold” call for Hutchison Port Holdings Trust (HPHT), with a fair value of 43 US cents. This comes on the back of a decline in its Hong Kong Port Container Throughput volume and a lack of clarity regarding the implications of Brexit, according to a report dated Thursday.

In a sign of slowing activity, HPHT’s Hong Kong Port Container Throughput has fallen 10.1% on a YTD basis, while China Shenzhen Container Throughput was up only a modest 0.7%.

While May figures indicated a 5.6% increase in Shenzhen’s volume, HK operations registered a 6.1% decline in the corresponding period. The research house believes that there is unlikely to be a sufficiently strong recovery in HPHT’s throughput in 2H16 to end the year flat for HK.

Aside from declining throughput in its HPHT’s HK operations, the research house has also identified the lack of clarity surrounding the implications from Brexit as a cause for concern.

The research house expects a drop in shipping activity in the event of regional or worldwide depressed economic activity. In addition, a weakened Euro would also dampen the purchasing power for Chinese goods.

Considering May figures and the lack of clarity regarding the implications of Brexit, the research house has maintained its FY16 throughput growth assumption for HPHT’s HK terminals.

The research house has also maintained its FY16 DPU forecast at 28 HK cents, assuming an 88% payout of distributable income.

FY17 DPU forecast on the other hand, has been revised upwards from 28 cents to 30 cents.

As at 12.54pm, HPHT was down 1.1% at 45 US cents.