Hong Kong's Quamnet.com, an online financial information provider, has become the latest victim of unfavourable market conditions for Internet companies, announcing this week that it is delaying it initial public offering on the Growth Enterprise Market (GEM). The decision underscores just how difficult it has become to sell Internet stocks since global technology stocks started nosediving in March.
Quamnet's delay follows that of ColbyNet, a logistics and sourcing company with an Internet base, which postponed its IPO again last week. Both companies are sponsored by HSBC Investment Bank Asia. Quamnet's chief operating officer Dylan Tinker said the company was in "wait-and-see mode."
Quamnet, which was launched in late 1998, has experienced rapid growth (it is now the fourth most viewed site in Hong Kong) and last month received approval to list on the GEM. As well as providing real-time stock quotes, bilingual financial news and market analysis on Hong Kong and mainland stocks, the company is also registered as a licensed investment adviser under the rules of the Securities & Futures Commission (SFC) in Hong Kong.
Quamnet's postponed IPO comes after HSBC advised the company against listing in the short term, even at a low valuation, because of a downturn in investor enthusiasm towards Internet stocks and the company has yet to decide when to go ahead with a listing. Mr Tinker said the directors were divided on this, with some wanting to list in July and others in favour of postponing it further.
Internet-related stocks, which have come under heavy selling pressure in recent months, have dragged down the Growth Enterprise Index, the barometer of GEM. This week the index fell 3.49 per cent to finish at 531.19 points. The index has fallen 49.18 per cent from its high of 1,045.32 points at the end of March. According to some stockbrokers, the postponed Quamnet listing on the GEM could have the effect of further dampening investors' ardour towards Internet stocks, at least in the short term.
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