Globally, the amount raised from stock market flotations is down 46 per cent on 2011 year-to-date. Hong Kong, one of the busiest listing venues in recent years has seen a particularly dramatic drop, with deal volumes falling 85 per cent in the first five months of 2012 versus the same period last year.
While Europe, which has been buffeted by the euro zone debt crisis, has seen little IPO activity of any note for almost a year, the U.S. had until recently proved more resilient.
That all changed earlier this month, with the market now suffering from the fallout of Facebook's IPO debacle.
The market slump is likely to put pressure on other planned IPOs, such as motor racing firm Formula One's planned $3 billion Singapore flotation. Despite expectations the deal will be priced next month, Formula One chairman Peter Brabeck said last week he had yet to give the final go-ahead.
"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, the fourth major IPO to be called off in Asia this week, had been due to price its Hong Kong IPO on Friday, putting it on the verge of becoming Asia's biggest completed flotation so far this year. But investors baulked, spooked by market-wide fears over the euro zone crisis and China's economic slowdown.
Some analysts and fund managers had already begun questioning Graff's valuation before Wednesday's global market sell-off, citing a slowdown in luxury spending in China.
The jeweller, which had planned to raise capital to help build a bigger Asian business centring on China, pulled its IPO as European and U.S. markets tumbled more than 1 percent on Wednesday. Asian shares followed suit on Thursday, with an MSCI pan-Asia index falling 1.6 per cent.
Rival Tiffany & Co had added to the pressure, cutting its sales forecast last week and blaming slower demand from key markets such as China.
"Consistently declining stock markets proved to be a significant barrier to executing the transaction at this time," Graff, due to make its debut next week, said in a statement.
A slump in Asian equities in the past week has already derailed three major IPOs aiming to raise a combined total of up to $1.37 billion: two in Hong Kong and one in Singapore.
The value of IPOs pulled in Asia ex-Japan has jumped to $7.7 billion so far in 2012 from 46 planned offerings, up from $5.8 billion, according to Thomson Reuters data. Hong Kong accounted for most of the scrapped deals.
Hong Kong's benchmark Hang Seng index has plunged 12 per cent since May 7, when Graff executives, its bankers and advisers began meeting institutional investors and fund managers to gauge demand for the offering.
Stocks in the luxury goods sector have been hit particularly hard, with Chow Tai Fook down about 23 per cent over the same period and Tiffany falling 14 per cent.
Credit Suisse Group, Deutsche Bank, Goldman Sachs and Morgan Stanley were hired as joint global coordinators on the Graff IPO. Rothschild acted as financial adviser to the London company on the transaction.
CRISIS OF CONFIDENCE
This month both Georgia's state railways monopoly and Russian real estate investor O1 Properties pulled planned London listings, blaming volatile markets as uncertainty over the future of Greece deterred investors from taking the risk of putting money into IPOs and emerging markets.
Facebook's high profile IPO shambles -- hit by technical glitches which disrupted its first-day of trading, lawsuits targeting underwriters for selectively sharing changes to analyst forecasts, and a more than 25 per cent drop in its share price -- has also knocked investor confidence.
Twelve 12 U.S. IPOs have been withdrawn or postponed in May.
"This has created a crisis of confidence.," said Scott Sweet, managing partner at IPO Boutique. "The companies still in the pipeline will stay in the pipeline. There is no reason to rush out when the grand daddy of them all has come and gone and left an indelible negative impression."
For now, companies continue to press ahead with offerings in Asia. Malaysia launched on Thursday the biggest Asian IPO to hit the road so far this year: a $3 billion offer in Felda Global Ventures Holdings Bhd, the world's third-largest palm plantation operator. It is preparing for a market debut on June 28.
Felda is not expected to suffer the same fate as Graff. So-called cornerstone investors are taking about two-thirds of the shares, and the Malaysian government is using the sale to deliver a windfall of more the $500 million to tens of thousands of landholders ahead of an expected election.
"The chance of it being successfully listed is quite high," said Alan Tan, fund manager for Asian equities at Lion Global Investors in Singapore.
The biggest IPO still in the Asian pipeline is Chinese state-owned insurer PICC Group, which plans to raise up to $6 billion in a Hong Kong-Shanghai dual listing. IPOs from Chinese state-owned entities could be less sensitive to market volatility because they tend to be supported by funds of other government companies and by China's sovereign wealth fund.
Deals from so-called defensive sectors such as utilities or high-dividend companies should also fare better in the current market, though no IPOs are seen as easy sells, bankers said.
Formula One, whose revenues are underpinned by multi-year contracts, could appeal to defensive-minded investors, although one banker not involved in the IPO noted: "Even so, they would be quite brave to do it."
While those working in the market said the so-called IPO window could reopen later in the year, this would depend on China easing monetary policy and Europe finding some kind of resolution to its debt crisis.
"Bankers aren't very optimistic for the second half, it's going to be very difficult," said one Hong-Kong based capital markets lawyer.
Copyright @Thomson Reuters 2012