A woman walks past Exchange Square which houses the Hong Kong Stock Exchange in Hong Kong on April 27, 2022. (DALE DE LA REY / AFP)

Global accounting services advisory firm KPMG and PricewaterhouseCoopers (PwC) expect Hong Kong to regain its place among the world’s top three fundraising destinations this year, as fundraising amounts surged in the city during the second half.

According to KPMG, the number of IPO deals and total IPO fundraising proceeds from the city’s initial public offering (IPO) market have recorded an annual decrease of 25 percent and 70 percent respectively. But, after a slow start, Hong Kong’s market saw a surge in fundraising in second half of 2022 that accounted for more than 80 percent of the full-year IPO proceeds.

The Hong Kong market is expected to remain one of the top listing destinations in 2023 with a solid pipeline of more than 120 companies seeking IPOs aiming to raise HK$180 billion ($23.07 billion) from around 90 deals.

Irene Chu, partner and Hong Kong head of New Economy and Life Sciences at KPMG China

“The Hong Kong market is expected to remain one of the top listing destinations in 2023 with a solid pipeline of more than 120 companies seeking IPOs aiming to raise HK$180 billion ($23.07 billion) from around 90 deals,” predicted Irene Chu, partner and Hong Kong head of New Economy and Life Sciences at KPMG China.

“The Chinese mainland’s program of policy measures aimed at stabilizing the economy and pursuing high-quality economic development will help to create a favorable environment for fundraising,” Chu said.

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She added that the rules for specialist technology companies proposed by Hong Kong Exchanges and Clearing will open the door for high growth innovative enterprises at early stages of development to list in Hong Kong and raise funds for further research and development.

Meanwhile PwC estimates total fundraising in Hong Kong will fetch between HK$180 billion and HK$200 billion from 100 IPO deals in 2023.

“We expect Hong Kong’s IPO market to rebound in 2023 as factors such as major interest rate hikes by central banks are gradually digested,” PwC Hong Kong Entrepreneur Group Leader Benson Wong said.

“Hong Kong Exchanges and Clearing is now consulting on the new listing rules for specialized technology companies. When the rules are implemented, it is expected that more technology companies will be attracted to come to Hong Kong for fundraising,” Wong added.

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PwC forecasts that total IPO deals and total IPO fund proceeds in 2022 will be 19 percent and 68 percent lower than in the previous year, respectively. The slowdown in IPO fundraising has been due to the ongoing pandemic, geopolitical uncertainties, and interest rate hikes in many countries to suppress inflation.