HONG KONG-Shui on Land has called off its HK$8-billion ($1-billion) IPO on the Hong Kong stock exchange. A statement by the Chinese property flagship of Hong Kong tycoon Vincent Lo says it would postpone its $1-billion offering because of poor market conditions. Uncertainty now surrounds the planned IPOs of Shimao, one of Shanghai’s largest real estate companies, which on Wednesday launched a roadshow for a $652-million initial public offering in July. Doubts also remain about Greentown China Holdings, a private property developer that hopes to raise as much as $600 million in Hong Kong stock by September.

In a statement to the Hong Kong Stock Exchange, Shui On Land said: “In light of deterioration in market conditions, the company and the joint global coordinators have decided to postpone the global offering. …The company looks forward to re-launching the offering at the earliest suitable opportunity.”

Shui on Land was planning to close its offering on Thursday and begin trading on June 23. But Hong Kong’s stock market has been caught up in the turbulence affecting global capital markets, with the Hang Seng Index falling to a five-month low earlier this week. Global markets are jittery about the prospect of rising interest rates as the US Federal Reserve tries to damp down inflationary pressures. At the same time there has been a re-pricing of risk premiums globally and capital flight from emerging markets. Earlier this month, Sun Hung Kai Properties and Henderson Land Development postponed launching their REITs in Hong Kong. The Hong Kong companies have also been hit by concerns about contradictory indicators about mainland China’s property market. China is less affected by the knock-on effects of US rate rises.

The government is keeping interest rates low in an attempt to stem the capital inflows that threaten to distort its money supply. But at the same time, ministers have sought to slow the property market by limiting the amount of land available for expensive developments.

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