Next year will see record figures for Chinese initial public offerings due to the resumption of IPOson the Chinese mainland and strong Hong Kong momentum, according to a Ernst & Young reportreleased on Monday.

"We believe 2014 will be a record year in China and globally, with economic fundamentals andstrong global liquidity fueling new listings," said Terence Ho, Ernst & Young's Greater Chinastrategic growth markets leader.

The China Securities Regulatory Commission suspended IPOs in October 2012, as part of acrackdown on fraud and irregularities among advisers. The commission said at the end ofNovember that China would resume IPOs in January 2014.

Hong Kong ranked second globally by IPO capital raised in 2013, up 80 percent from 2012, andthe strong performance will positively influence that in the first quarter of 2014, the report said.

"Small and medium-sized enterprises will be the main driving force of Chinese mainland IPOsnext year," said Ho. "IPO funds raised in the Chinese A-share market in 2014 can be as much as200 billion yuan ($32.70 billion)."

The report said that more than 100 IPOs will be launched in Hong Kong in 2014, raising aboutHK$180 billion ($23.2 billion).

Ho added that the imminent re-opening of IPOs on the Chinese mainland exchanges in the firstquarter of 2014 will bring a pipeline of more than 700 companies in the queue for approval, whichwill act as a catalyst for further activity across the region.

Of the companies in the queue, many are planning to get listed on the ChiNext board, whichstarted trading on October 2009, and is home to high-tech companies and those with high growthpotential.

Eighty-three Chinese companies have already completed the IPO examination process andreceived approval from the CSRC. About 50 are expected to have finished all the IPOprocedures and to be listed before the end of January 2014.

The largest companies in the first batch of IPOs will likely be Shaanxi Coal Industry Co Ltd andChina Post Group. The two plan to raise 27.2 billion yuan, accounting for about 62 percent of thefirst batch, the report said.

It added that the first batch of IPOs will be actively pursued by investors because the companieshave gone through a strict financial verification process and the IPO hiatus has been long inChina.

At the end of November, China launched a reform plan for new listings to boost the country'sstock market over the long term.

The Ernst & Young report said the reform plan will likely reduce the examination and approvalprocesses, so the number of IPOs on the Chinese mainland market will increase in 2014.

Companies in the industrial, TMT and retail and consumer sectors are the most likely to beapproved by the CSRC, and those three sectors will also be the most popular in the Chinese A-share IPO market in 2014, said the report.

Many IPOs will also be seen in the environmental protection, services, Internet finance andmobile Internet sectors next year, it added.

"Despite the freeze in IPOs on the Chinese mainland, with listings suspended since late 2012,Greater China has seen high levels of activity in 2013, with Hong Kong seeing an increase in thenumber of deals and total funds raised, a trend that is set to continue into 2014," said HoffmanCheong, an assurance leader at Ernst & Young China North Region.

Cheong said that total IPO funds raised in Hong Kong this year are expected to reach HK$162billion, up 80 percent from 2012, with the mild recovery of the global economy and a stabilizationof the Chinese economy behind the increase.

Positive factors for Hong Kong's new listings in 2014 will include the steady global economy andChinese reforms.

Companies in the financial services, property, retail and consumer, and healthcare sectors willbe popular in the Hong Kong IPO market in 2014.

Arthur Kwong, head of Asia Pacific equities at BNP Paribas SA, said the market will focus oncompanies benefiting from reform policies, such as the relaxation of the one-child policy.

In the financial sector, as the upcoming interest rate liberalization is expected to erode the profitmargins of banks and the shadow of local government debt is still hovering, investors shouldbe careful with Chinese bank stocks, said Kwong. However, as the penetration rate of lifeinsurance is comparatively low in China and the urbanization drive and financial reform willstimulate growth, Chinese insurers are recommended in 2014.