Property developer Globe Asiatique Realty Holdings Corporation has decided to shelve its P3.4 billion initial public offering – a day after it was approved by the Philippine Stock Exchange.

In a letter to the PSE, Globe Asiatique chief finance officer Dexter Lee said the firm is “compelled to defer its intended initial public offering mainly due to the weak global market conditions.”

He noted that, following the recent global financial crisis, investors have been expecting the market to return to its normal state. Globe Asiatique’s would have been the first firm to test the market for an IPO this year.

“However, as a result of the continued instability of the world market coupled with the lack of sufficient investments, global economic stability is not expected soon. People remain wary of investing in emerging markets,” Lee explained.

Thus, Lee said that “despite the favorable second quarter growth performance of the Philippines, investments in the real estate sector have been very cautious and have been centered around the larger and more well-known players in the market.”

In addition, Lee said the firm needs at least a couple of months to complete the updating of its audited financial statements since the Securities Regulation Code requires that the financial information in its registration statement must not be more than 135 days old.

Globe Asiatique had intended to start its bookbuilding process on September 6, 2010 and offer its shares from September 15 to September 22 while the listing date has been set for September 30.

The firm was planning to sell 136.37 million primary shares while its shareholders will sell 34.09 million shares in a secondary offering. It had also allotted 168.71 million new shares as an over-allotment option.

Globe Asiatique planned to sell its shares between P6.50 and P10 per share to raise funds to finance the construction of several projects, the payment of bank loans (P180 million to P1 billion) and operational expenses (P100 million to P250 million).

The firm has recently been embroiled in a dispute with the Home Development Mutual Fund (Pag-IBIG Fund) over allegations that hundreds of borrowers were not the ones who were actually availing of loans for the purchase of houses from Globe Asiatique.

These allegedly questionable accounts represent funds amounting to hundreds of millions of pesos that had already been released to the company. Most of these were in Pampanga where the firm’s projects are located.

Major shareholder Delfin Lee had been reported to have informed Pag-IBIG that the developer was “closely monitoring some 1,000 accounts which we suspect are of questionable buyers [and that] we have since cancelled 400 of these accounts.”