Flotation of Chinese mainland firms and Hong Kong's pegging system still support the global financial hub to maintain its status despite challenges, economist said.

The Hong Kong Stock Exchange has topped global IPO fundraising for seven of the last 13 years.

Iris Pang, greater China chief economist of ING Bank, said many well-known companies from the Chinese mainland that are listed in Hong Kong also issue bonds in the city.

"This is a new growth area in terms of fundraising activities, and these companies usually raise a lot of funds at one time. So, it makes the IPO quite big compared to other listed companies in the world," she said.

Funds raised from IPOs on Hong Kong's Main Board is predicted to reach as much as HK$400 billion (about $51 billion) in 2022.

In 2020, the total market capitalization of companies listed on Hong Kong's Stock Exchange expanded by nearly 25 percent, reaching a record high.

Pang believes the reasons behind the vibrancy of the city's capital market are multi-faceted.

"Hong Kong's linked exchange rate system makes Hong Kong dollar fairly stable and reduces exchange rate risk for players in Hong Kong. You can almost predict accurately that the Hong Kong interest rate will always be going with the U.S. interest rates," Pang said.

There's been some concern in recent years about whether the city can maintain its status against the backdrop of rising geopolitical tensions, the COVID-19 pandemic and high global inflation. Hong Kong also faces competition from countries like Singapore.

Pang believed opportunities still exist because Hong Kong is integrated with the Chinese mainland in terms of Renminbi cross-border transactions, and digital currencies, which are the future of the payment system. 

"To keep up the momentum with the [Chinese] mainland, the economy and also the financial sector reforms, we have to be part of them," Pang said.

Hong Kong ranked third on the 2021 Global Financial Centers Index, only behind New York and London. Expert said its status speaks to the resilience of Hong Kong's capital market.