RIGOL Tech slides 17% on gray market ahead of Hong Kong listing

RIGOL Tech (00537.HK) closed at $38 on the gray market, down 17.4 percent from its listing price, ahead of its July 9 debut on the Hong Kong Stock Exchange.

The stock opened 13 percent lower at $40, according to Futu data. It peaked at $41 and bottomed at $32 during the session, with 556,300 shares changing hands and turnover reaching $21.28 million. Excluding handling fees, the book loss was $798 per board lot of 100 shares.

PhillipMart data showed a similar trajectory, with the stock closing at $38.02, down 17.3 percent, on volume of 330,000 shares and turnover of $12.7 million. The book loss stood at $796 per board lot. The two data providers reported slightly different session lows of $32 and $25 respectively, reflecting the fragmented nature of gray market trading across different broker platforms.

Gray market trading, conducted through select brokers before official listing, serves as an early indicator of investor demand. A decline of more than 17 percent suggests cautious sentiment among pre-listing buyers, though gray market volumes typically represent only a fraction of the total float.

The gray market weakness points to tepid demand ahead of the company's Main Board listing. RIGOL Tech's debut on July 9 will test whether institutional buyers step in, as Hong Kong's IPO market has seen strong first-half activity but lacked mega-sized listings, according to a BofAS note that cut HKEX's price target to HKD500. The broader market backdrop remains challenging, with the Hang Seng Index facing headwinds from global trade uncertainty and a slower-than-expected economic recovery in China.

This article is for informational purposes only and does not constitute investment advice.