Accounting giant Deloitte on Wednesday forecast that Hong Kong's initial public offering (IPO) market could make the top three globally this year, with around 160 new listings raising at least HK$300 billion.

The prediction came as the city has already seen 40 new listings raising HK$109.9 billion in the first quarter of the year, five times the funds raised in the same period last year.

It also marks the best performance in five years both in terms of the volume of funds raised, and the number of new listings.

But speaking at a press conference, Edward Au, southern region managing partner at Deloitte China, warned that "the tide could change quickly" as the city also faces fierce competition with the Nasdaq and New York Stock Exchange.

"We've seen strong competition from the US, especially with the potential mega IPOs in AI and space [sectors].

"And if these deals go ahead, definitely, [the companies] could shift the global rankings quite easily," Au said.

"But that said, Hong Kong's strengths are not only about one or two 'blockbuster' deals, but also the deep and consistent pipelines, particularly from those Chinese and regional issuers," he added.

Au noted that while the latest geopolitical uncertainties arising from the Iran war have caused investors to be more cautious with investments in "risky assets", including IPOs, he believes that more funds might still flow into Asia due to the region's relatively safe environment, and as investors re-allocate portfolios.

He added that the firm forecasts that about seven companies that are currently seeking to list here might be able to raise at least US$1 billion this year.

Separately, the number of mainland firms seeking to list in the US has plunged in the first quarter of the year, with only one company listing there, compared to the 21 seen in the same period last year.


Edited by Aaron Tam