Graff failure casts cloud over Asian IPOs The collapse of Graff Diamonds" $1bn initial public offering in Hong Kong highlights the challenges facing groups such as Formula One that hope to list in Asia in the coming months. The high-end jeweller is the third company in the past week to pull a Hong Kong IPO, after China Nonferrous Mining Corp, a copper producer, and China Yongda Automobiles Services, a car dealer, also scrapped deals. Ascendas Hospitality Trust this week postponed a $630m IPO in Singapore because of "challenging market conditions," with global stocks falling more than 8 per cent over the past month. In the US, confidence in IPOs has been badly shaken by Facebook, whose shares have lost more than a quarter of their value since the social network raised $16bn from investors. While deals are falling apart left, right and centre, the failure of Graff to complete its large, high-profile IPO is a big blow to the Hong Kong market, according to dealmakers. Unlike recent scrapped offerings in small and unloved sectors such as resources, Graff was a big prospect in a hot sector. "This is more damaging [than the other failed deals] because it's consumerism and consumer stuff had continued to perform well," says one dealmaker. It's a real sign that the markets really are not open for deals. F1, Bernie Ecclestone's racing group, is preparing for a $2bn IPO in Singapore next month, in an unusual "stapled" deal that will see its shares sold together with debt. Felda, the Malaysian palm oil group, on Thursday unveiled the prospectus for its $3bn listing on the Bursa Malaysia stock exchange. Graff's failure is a warning sign for companies planning to issue equity in coming weeks. Philippe Espinasse, author of IPO: A Global Guide, said: "Such a high-profile deal being pulled will certainly mean that issuers will now be even more cautious before launching their IPOs." Mr Espinasse added that many companies planning offerings would need to "revise their ambitions in terms of valuation" and would be advised to secure cornerstone investors and anchor orders ahead of launch. Graff did not sign up cornerstone investors for its deal. Cornerstones are large investors who commit to buying a certain number of shares before the IPO is launched in exchange for a guaranteed allotment in the deal. Analysts say Graff's shares were expensive compared with other luxury groups such as Richemont, and that its lack of brand recognition among many investors was another problem. Other groups "premarketing" IPOs in Hong Kong at the moment include Inner Mongolia Yitai Coal, Chinalco Mining Corp International and Huadian Fuxin Energy Corp. Dealmakers says some of these deals are likely to be withdrawn or postponed unless markets recover substantially. Sany Heavy, a Chinese machinery maker, is planning a $2bn share sale in the city in the coming months, according to dealmakers, having scrapped a $3.3bn listing last September. Some 46 companies have withdrawn or postponed IPOs worth a total $7.7bn in Asia in 2012, according to Thomson Reuters. Hong Kong, the world's biggest centre for listings in 2010 and 2011, has dropped to fourth place this year, after Nasdaq, New York, and Shenzhen. Hong Kong listings have totalled $3.2bn this year, according to Dealogic, compared with $35bn for the whole of 2011. Investors in the city have been burnt by the poor performance of many deals over the past few years. Shares in Chow Tai Fook, for example, have fallen almost a third since the jeweller listed in Hong Kong late last year. Singapore's SGX exchange has attracted six IPOs this year including Bumitama Agri, another Malaysian palm oil producer, and, last week, Swee Hong, a construction and tunnelling company in Singapore. Magnus Böcker, SGX chief executive, said: "While we do not disclose our IPO pipeline, it remains healthy and a number of companies are ready to come to the market when conditions are right." Investors will be watching to see whether F1 presses ahead with a planned $3bn float in Singapore next month if conditions worsen. Plans last year by Manchester United to list in Singapore were put on ice shortly after the football club notified the exchange of its intent to seek a listing, due to poor market conditions. Additional reporting by Jeremy Grant in Singapore