Deloitte has predicted the Hong Kong bourse has the potential to clinch the fourth spot globally in terms of IPO fundraising in 2024, following Chinese appliance giant Midea’s listing — the year’s second-largest IPO worldwide.

However, according to its review and outlook for the Chinese mainland and Hong Kong IPO markets published on Wednesday, the accounting giant maintained its mid-year forecast for total capital raised from new listings on the Hong Kong Stock Exchange in 2024, with a range of HK$60 billion ($7.7 billion) to HK$80 billion from about 80 listings by year-end. Its low-end estimate is 40 percent below January’s forecast.

Deloitte forecast that Hong Kong would record 45 IPOs raising HK$50.9 billion in the first three quarters, up from 44 listings raising HK$24.6 billion in the same period last year.

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According to HKEX data, there are 101 listing applications in the pipeline to date.

The Deloitte China Capital Market Services Group revealed these applicants, from sectors such as consumption, artificial intelligence, hard tech, life science, as well as green and sustainability, include potential mega IPOs.

“Although raising large funds is important to sustain Hong Kong’s competitiveness in the global IPO market, it is equally important that we continue to see the market diversity and become more adaptable to a broader array of businesses by listing companies from different sectors and various business,” said Robert Lui, southern region Hong Kong offering services leader of the capital market services group of Deloitte China.

Hong Kong’s potential to secure a top-four position in global IPO rankings this year hinges on two main factors, the report said. One is the possibility of further interest rate cuts following a hefty 50 basis point reduction by the US Federal Reserve. The other is improved fundamentals such as robust Chinese economic indicators.

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These factors could contribute to lifting liquidity inflows and enhancing Hong Kong’s appeal as a listing destination, the report revealed.

Edward Au, the southern region managing partner of Deloitte China, said, “Reforms by mainland and Hong Kong regulators, including those under Stock Connect, such as making dual-counter equities available to mainland investors and expanding eligible exchange traded funds, and collaboration agreements with Middle East and Malaysia stock exchanges, are expected to form a strong backbone for sustained growth in Hong Kong’s IPO market.”

The September debut of Midea’s IPO on the Hong Kong Stock Exchange raised HK$31 billion, making it Hong Kong’s largest IPO since Kuaishou Technology’s $6.2 billion listing in early 2021.

The international financial hub saw new funds raised from IPOs plummet to a two-decade low in the first six months of this year, with HK$13.1 billion raised from 30 new firm listings.

In a proposal for Policy Address 2024, Cliff Ip Wang-hoi, Greater China divisional president for CPA Australia, urged the government to implement an IPO Connect program, which would allow qualified mainland investors to trade new shares listed in Hong Kong. The initiative is expected to boost trading liquidity in the Hong Kong stock market.

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Hong Kong stocks’ benchmark Hang Seng Index climbed 0.68 percent to close at 19,129 on Wednesday. The Hang Seng Tech Index edged up 0.23 percent, to 3,924, while the Hang Seng China Enterprises Index added 0.76 percent.

Deloitte predicted Nasdaq would take the lead in the global IPO race by the end of the third quarter, followed by the New York Stock Exchange and the National Stock Exchange of India.

The Shanghai Stock Exchange is set to remain in fifth place, while the Shenzhen Stock Exchange takes in eighth position, it said.

Contact the writer at tianyuanzhang@chinadailyhk.com