In this file photo dated April 27, 2022, a woman walks past Exchange Square which houses the Hong Kong Stock Exchange in Hong Kong on April 27, 2022. (PHOTO / AFP)

The Hong Kong initial public offering (IPO) market is expected to rebound in the fourth quarter of this year, according to a report by Deloitte China on Monday.

In the first half of 2023, 31 IPOs listed in Hong Kong and raised HK$17.8 billion ($2.28 billion), which is a 29 percent increase in deal volume and a 1 percent increase in deal value compared to the same period in 2022. Only one large offering and one return listing of a China concept stock occurred in Hong Kong during this period.

Deloitte expects there will be nearly 100 new listings in Hong Kong this year, raising approximately HK$180 billion, impacted by the enhancements to Stock Connect

"Global banking issues, ongoing US interest rate hikes, and the US debt ceiling deal have made capital markets more volatile," said Robert Lui, southern region offering services leader of the Capital Market Services Group, Deloitte China. "But the Hong Kong capital market has undergone many exciting reforms such as the launch of the listing regime for specialist technology companies and today's launch of dual counter securities. Many businesses are still actively preparing for listings here while they wait for key indicators like market valuations to pick up."

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Deloitte expects there will be nearly 100 new listings in Hong Kong this year, raising approximately HK$180 billion, impacted by the enhancements to Stock Connect, spin-offs of technology companies, listings of China concept stocks, the new listing regime for specialist technology companies, and international listings.

"Once the US Fed can indicate clearly when the interest rate hike cycle will end and China can introduce more economic stimulus measures, we expect the Hong Kong IPO market to re-activate, driving a repositioning of funds' investment strategies to Asia's high-growth regions like China," said Edward Au, Southern Region managing partner, Deloitte China. 

As for the A-share market, it is anticipated that 174 new listings will become publicly available in total in the first six months of this year, generating a total of 209.5 billion yuan ($29.25 billion) in funds. In comparison, there were 169 IPOs that raised 311.9 billion yuan in the same period in 2022, indicating a 3 percent increase in the number of IPOs and a 33 percent decrease in funds raised.

READ MORE: Deloitte: HK IPOs expected to raise around HK$400b in 2021

Global capital markets have also experienced a decline due to several factors during the first half-year. It is expected that the Shanghai Stock Exchange and the Shenzhen Stock Exchange will emerge as the top two listing destinations in the world by funds raised from January to June, followed by the New York Stock Exchange, Abu Dhabi Securities Exchange, and Nasdaq. The Stock Exchange of Hong Kong is projected to rank 6th.