Electronic boards display various stock prices at Exchange Square in Hong Kong on March 9, 2020. (ISAAC LAWRENCE / AFP)

HONG KONG - Hong Kong has more than a hundred applicants in the pipeline for initial public offerings (IPOs) and is eyeing more companies and investors from markets including the Middle East and Southeast Asia, the chairman of the city's bourse operator said.

Public floats by Chinese mainland companies account for most of the IPOs in the Hong Kong Special Administrative Region, one of the top listing venues globally and a major driver of revenue and fee income for the world's biggest investment banks.

While Cha expects mainland companies, mostly those from the new economy sector, to revive their capital raising plans in the SAR, HKEX is also looking to attract others from elsewhere to burnish its credentials as an international platform

Roughly $6 billion has been raised via 50 IPOs so far this year in the Asian financial hub, Refinitiv data shows, down sharply from more than $25 billion in 2021. 

"I am quite confident that the IPO market activity will return very quickly in the new year," Hong Kong Exchanges and Clearing Ltd (HKEX) Chairman Laura Cha Shih May-lung said in an interview at  the Reuters NEXT conference. 

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"Currently, we have over a hundred companies in the pipeline. Many of them are waiting for the market sentiment to improve so that their valuations could be better when they come to the market," she said.

While Cha expects mainland companies, mostly those from the new economy sector, to revive their capital raising plans in the SAR, HKEX is also looking to attract others from elsewhere to burnish its credentials as an international platform.

On the radar are prospective investors and issuers from the Middle East and Southeast Asia.

"We are trying to broaden our international footprint in terms of the products that we are offering," she said. "In other words, we will make ourselves much more diversified (with) many more international companies and that will be our strategy."

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International investors account for about 42 percent of investments in Hong Kong's equity market, and that share is "a lot higher" in the derivatives market, Cha said. "So, we are already international in nature, but we will continue to expand that."

The city has also lifted most of its COVID-19 restrictions in the last couple of months.

"With COVID restrictions being removed, almost completely now, and the financial markets also performing well, I think we will be able to continue to attract new talents into Hong Kong," Cha said.

"So for us, there was, like the rest of Hong Kong, a higher attrition rate about 12 months ago, and that has come down now."