It is suggested the pricing of Swire Properties was too high when the initial public offering was started in April. Before factoring in new money raised, the midpoint of the range it represented a discount of about 10% to its estimated net asset value for 2010 — less than half that of comparable companies.
What possibly gave Swire second thoughts was a collection of patchy measures from Beijing determined to quell rapid property price increases. It has raised minimum down payments and restricted mortgage lending. The stocks of Swire’s Hong Kong peers have fallen as much as 9% in two weeks.
The New York Times reports that despite the Swire withdrawal there is still confidence in some parts of the Chinese IPO market. The $700 million offering by the cosmetics maker L’Occitane showed boom-time exuberance: the retail part was oversubscribed by 160 times.