London-based jeweller Graff Diamonds has decided to postpone its US$1 billion initial public offering in Hong Kong, citing weak market conditions – just one day prior to when it was scheduled to price the stock.

Graff’s IPO is the largest IPO withdrawn in Asia. It says weak global stock markets concerning European debt crisis and the 10 per cent decline in Hong Kong’s benchmark Hang Seng Index contributed to its decision.

The postponement comes as jeweller Tiffany & Co cut its outlook due to sluggish US sales and after Facebook stock took a battering post its listing. 

“Consistently declining stock markets proved to be a significant barrier to executing the transaction at this time,” said Graff in the statement.

Graff joins companies including car dealer China Yongda Automobiles Services who pulled its US$433 million IPO and mining firm Nonferrous Mining who scrapped its US$313 million IPO in Hong Kong IPO.

“Appetite for new listings is pretty weak generally because of the macro situation,” said Eugene Mak, an analyst at brokerage Core Pacific Yamaichi in Hong Kong.

Graff’s June 7 listing was set to be the latest foreign company to join Hong Kong IPO after Prada’s public listing in the city last year.

In the last three years, Hong Kong has been the top IPO venue until its US$1.8 billion offering by Haitong Securities was eclipsed by the US’s US$16 billion offering by Facebook.

Graff Diamonds, founded by Laurence Graff in 1960, has 18 directly operated and 13 franchised stores. It reported sales last year of US$755.6 million, up 23 per cent from US$616.7 million in 2010.

GB