Middle East war weighs on Hong Kong market debuts

Market debuts in Hong Kong faced significant pressure on Monday as geopolitical tensions in the Middle East dampened investor appetite for new listings. Three companies that had hoped to capitalize on the city's early-year share sale momentum saw mixed results, with two suffering sharp declines on their first day of trading. Shenzhen Zhaowei Machinery & Electronic Co., Ltd. performed the best among the trio, with its shares rising approximately 4% from an offer price of HK$71.28. In contrast, industrial robot manufacturer Estun Automation Co., Ltd saw its shares drop about 14% after pricing at the bottom of its range. The most severe decline was experienced by reusable packaging service provider Alsco Pooling Service, which plummeted 40% on its first day of trading despite its retail tranche being oversubscribed more than 5,000 times. Dickie Wong, executive director of research at uSMART Securities, noted that investors were quick to take profits amid rising oil prices and broader macroeconomic jitters. > This highlights a fragile market environment right now. The region has seen a surge in oil prices and broader macroeconomic concerns since the conflict began late last month. While China had seen a wave of companies planning to go public following the Lunar New Year holiday, sentiment has shifted as the war stokes worries about global growth. In a research note, CICC suggested that equities in the region might face higher volatility than mainland A-shares during oil-driven risk-off periods, warning that prolonged high energy costs would eventually impact the broader economy. The cautious sentiment extended across the region. In South Korea, online lender K Bank saw its shares fall 16% below its IPO price by Monday after a lukewarm debut last week. Looking ahead, the pipeline for new listings remains active but faces a challenging environment. MeiG Smart Technology Co., Ltd is scheduled to list on Tuesday after setting its offer price at the maximum of HK$28.86. Elsewhere in Asia, UI Boustead REIT is set to begin trading in Singapore on Thursday, while Sunway Healthcare is preparing for its debut in Malaysia on March 18.