HK Stock Market Move | Shipping stocks generally weakened, OOIL (00316) dropped nearly 4%. Maersk Line announced the resumption of the Red Sea route.

Shipping stocks in general are soft, as of the time of writing, OOIL (00316) fell by 3.72% to 121.7 Hong Kong dollars; SITC (01308) fell by 2.93% to 26.5 Hong Kong dollars; COSCO Shipping Holdings (01919) fell by 2.77% to 13.34 Hong Kong dollars. On the news front, Danish shipping giant Maersk announced on January 15 that it will resume sailing through the Red Sea and Suez Canal after the security situation in the region has stabilized, but will continue to closely monitor the security situation in the Middle East. This marks an important step towards normalcy in the shipping industry after global maritime trade was disrupted for two years due to attacks on ships by Houthi militants in Yemen. The market generally believes that as ships gradually return to the shorter Suez route, freight rates may face downward pressure. A report by HSBC Global Research indicates that the resumption of shipping through the relevant sea areas could increase capacity by 7% to 8%, leading to a drop in freight rates. The bank predicts a 9% to 16% decline in freight rates this year, and has assumed that the disruption in Red Sea shipping will continue at least until the middle of this year. The bank currently sees downside risks to these forecasts.