Copper producer China Nonferrous Mining Corp has pulled its planned Hong Kong initial public offering of up to $313 million due to worsening market conditions, becoming the second major IPO to be scrapped in the city this week and underscoring tepid demand for new listings.

The decision comes days ahead of the pricing of Graff Diamonds up to $1 billion IPO, set to the Asia's biggest IPO this year.

CNMC, which has operations in Zambia, originally planned to finish taking orders for the deal on May 24, but extended the bookbuilding period to this week, Thomson Reuters publication IFR reported on Wednesday, citing sources involved in the transaction.

It follows automobile dealer China Yongda Automobiles Services, which on Monday scrapped its $434 million deal.

High-end jeweler Graff is set to price its IPO on Friday.

Europe's debt troubles and slower growth in China have turned investors cautious about IPOs, with deals volumes in Hong Kong, Asia's IPO capital, down more than 80 percent so far this year.

Hong Kong's benchmark Hang Seng index (.HSI) is down 9.7 percent since the beginning of May and on Wednesday alone dropped 1.9 percent. The slump in markets has made listed companies a better option for investors than those looking to go public, analysts and investors have said.

IPOs had their worst start in about four years in the Asia-Pacific region in 2012, with overall equity market activity down about a fifth from 2011.

ABC International, China International Capital Corp (CICC), JPMorgan (NYS:JPM - News) and UBS (VTX:UBSN.VX - News) were hired by CNMC to manage the IPO.

Source : finance.yahoo.com