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Graff postpones IPO as investors steer clear
By Emily Ford |
May 31, 2012, Thursday
|
Online Edition
Online Edition
GRAFF Diamonds has shelved its proposed US$1 billion Hong Kong stock market listing after failing to find buyers for half of its shares, a sign economic fears are paralyzing stock exchanges around the world.
The flop by the London-based jeweler is by far the most high-profile in a string of canceled flotations planned for the Hong Kong Stock Exchange in recent days, the majority of them Chinese companies.
The ultra-exclusive diamond jeweler, which wanted to raise money to fund a huge expansion across China and elsewhere in Asia, began offering shares for sale on Monday but yesterday postponed the offering indefinitely, only two days before it was due to price the deal.
In a statement, Graff blamed the cancellation on a shaky stock market that has seen investors become wary due to fears over the state of the global economy.
Hong Kong's Hang Seng Index has lost more than 11 percent of its value in the past month, as global stock markets feel the chill from a possible Greek exit from the eurozone and renewed fears over the health of the Spanish economy.
"Consistently declining stock markets proved to be a significant barrier to executing the transaction at this time," Graff said in the statement.
Facebook, which earlier this month listed shares in an initial public offering on the New York Stock Exchange, has seen its stock price fall almost a quarter since selling them at US$38 apiece. Analysts had predicted demand could send the price as high as US$60.
In the past week Yongda, a Chinese carmaker, and China Nonferrous Mining Corp, a copper smelter, have both pulled their IPOs in Hong Kong, citing weak market conditions.
The flop by the London-based jeweler is by far the most high-profile in a string of canceled flotations planned for the Hong Kong Stock Exchange in recent days, the majority of them Chinese companies.
The ultra-exclusive diamond jeweler, which wanted to raise money to fund a huge expansion across China and elsewhere in Asia, began offering shares for sale on Monday but yesterday postponed the offering indefinitely, only two days before it was due to price the deal.
In a statement, Graff blamed the cancellation on a shaky stock market that has seen investors become wary due to fears over the state of the global economy.
Hong Kong's Hang Seng Index has lost more than 11 percent of its value in the past month, as global stock markets feel the chill from a possible Greek exit from the eurozone and renewed fears over the health of the Spanish economy.
"Consistently declining stock markets proved to be a significant barrier to executing the transaction at this time," Graff said in the statement.
Facebook, which earlier this month listed shares in an initial public offering on the New York Stock Exchange, has seen its stock price fall almost a quarter since selling them at US$38 apiece. Analysts had predicted demand could send the price as high as US$60.
In the past week Yongda, a Chinese carmaker, and China Nonferrous Mining Corp, a copper smelter, have both pulled their IPOs in Hong Kong, citing weak market conditions.
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