Evergrande Real Estate Group is expected to scrap its HK$16.5 billion initial public share offering following a lukewarm response from investors who fear the mainland property market is headed for a slump.
The Guangzhou-based developer has received less than half the minimum orders required for its institutional and retail tranches despite marketing the deal since last month, according to sources.
'The actual figure is astonishingly low,' they said. 'Everybody is waiting for the formal cancellation announcement.'
The central government is tightening credit and restricting loan growth at banks to control inflation and prevent asset bubbles appearing in the property market.
The company has set aside 10 per cent or HK$1.65 billion worth of shares for local investors while the remaining 90 per cent has been allocated to institutional investors.
The company has yet to make a final decision about whether to proceed with the offering. It will monitor market conditions before making an announcement.
In a rare move, Evergrande this week extended the retail subscription period for the offering by one day to attract orders to fill the minimum quota.
