Chinese herbal medicine manufacturer Shanghai Xing Ling Science and Technology Pharmaceutical confirmed yesterday that it has temporarily postponed its Growth Enterprise Market listing due to poor market conditions and denied other reasons reported by local media. Shanghai Xing Ling announced its decision to abort the listing of its H shares on the GEM board in a two-sentence statement to Hong Kong Exchanges and Clearing on Tuesday. 'On the day that our company's H shares start trading, all of our company's employees will watch its performance so we hope to list in better market conditions. On August 5, we watched how the market opened,' said Shanghai Xing Ling chairman Tang Qiqing. The Hang Seng Index opened Monday morning 106.92 points lower at 9,884.8 which was enough to convince Shanghai Xing Ling's management they should postpone the listing. 'We didn't notify the Hong Kong stock exchange until 2pm that afternoon, after holding a board of directors meeting at noon to decide to postpone the listing,' Mr Tang said. After the Shanghai-based company's announcement on Tuesday, the Hong Kong media speculated that there were other reasons why Shanghai Xing Ling did not want to list. The Hong Kong Economic Times reported a market rumour suggesting nearly 85 per cent of Shanghai Xing Ling's placement came from mainland hot money. The report said market makers could not complete subscriptions to Shanghai Xing Ling's shares because of concerns that a new policy to prevent mainland capital flowing into Hong Kong would be introduced during the 16th Communist Party Congress. Mr Tang said that he was unaware of any market makers subscribing to Shanghai Xing Ling's offering. Its 42.2 million share offering had been oversubscribed, he added. The Oriental Daily received an anonymous fax about a Hong Kong company signing a contract to sell Shanghai Xing Ling's products in Hong Kong which the newspaper alleged was not covered in the prospectus. Shanghai Xing Ling said the contract had nothing to do with postponing the listing. It planned to raise HK$49.6 million from its initial public offering to fund a production plant. Management said it hoped to list the company on the GEM as soon as possible. In the meantime, the company might use bank loans to fund the production plant.