(Yicai) Dec. 3 -- Hong Kong’s initial public offering market will rebound next year, and could return to the top tier of global rankings, while listings on the mainland stock markets will stay stable with signs of improvement, according to a report released by UK professional services network company Ernst & Young yesterday.

Hong Kong’s IPO market should regain its upward momentum in 2025 and return to being one of the biggest in the world, thanks to the Chinese government’s recent roll out of a hefty economic stimulus package, the support being given to help Chinese firms go public overseas and the US Federal Reserve’s current cycle of interest rate cuts, said Tang Zhehui, auditing services partner at EY China.

On the mainland, there will be a steady pace of IPOs next year and the market will stay stable, he added. The stock market will become easier to predict but it will not return to the fast pace of growth of previous years.

The world’s IPO market is expected to improve in 2025 as the global economic slowdown is easing and the private equity market has a backlog of funds trying to exit, the report said.

The global IPO market has slowed down considerably this year. The number of listings is likely to tumble 14 percent year on year to 1,162 companies and the amount raised to slump 7 percent to USD117.3 billion, according to the report.

The report predicts that the Hong Kong bourse is expected to rank fourth in terms of global IPO fundraising with USD10.7 billion this year, while the Shanghai and Shenzhen stock exchanges look likely to place sixth and seventh respectively.

Sixty-four companies went public on the Hong Kong stock exchange in the first 11 months, a gain of 6 percent from the year before, according to public data. They raised a combined HKD83.4 billion (USD10.7 billion), a jump of 80 percent year on year.

The average amount raised per IPO in the special administrative region surged 91 percent from the year before to HKD1.3 billion (USD167 million), as more companies raise tens of billions of Chinese yuan, equivalent to billions of US dollars. Ninety-five percent of Hong Kong IPOs were oversubscribed, 4 percentage points higher than last year.

The Fed's interest rate cuts and the Hong Kong bourse’s efforts to improve market efficiency and liquidity will support the rebound in Hong Kong IPOs, said Liu Guohua, an Ernst & Young auditing services partner. The mainland and Hong Kong stock exchanges have also drawn closer ties and more mainland tech firms are willing to go public in Hong Kong.

On the mainland, 95 firms held an IPO in the 11 months ended Nov. 30, a 70 percent drop from the year before. They raised CNY61.8 billion (USD8.5 billion), a dive of 83 percent year-on-year.

Mainland IPOs are concentrated in the industrial, technology and materials sectors. Eighty-eight percent of the flotations this year were in these three industries and they accounted for 90 percent of the funds raised. Of the 10 biggest listings this year, six were by tech companies.

Editor: Kim Taylor