The Hong Kong market for initial public offerings (IPOs) is drying up as market volatility scares off companies and the approach of holidays, when IPOs typically stop. A number of Mongolian firms, such as Mongolian Mining Corporation trade on the Hong Kong Stock Exchange (SEHK). State-owned Erdenes Tavan Tolgoi will also likely list on the HKEx in addition to markets in London and Ulaanbaatar, but difficulties in hammering out an agreement and upcoming elections have delayed the deal.

The fourth quarter is typically the biggest for IPOs in Hong Kong, accounting for 51 percent of annual IPO revenue, Hong Kong has been the top IPO destination in the world for the past two years and is second to New York this year.

However, since market volatility grew over the summer, the IPO machine has stalled. A month into the fourth quarter, markets remain frozen. Only the 1.7 billion Citic Securities IPO has completed. The window for IPOs typically shuts in mid-December, and an early showing for Chinese New Year on 23 January means offerings will not resume until February at the earliest.

“For the investment banks' bankers, fees are not going to be at the level that many had hoped for and that obviously will have knock-on consequences to bonus pools,” said Keith Pogson, financial-services managing partner for Ernst & Young.

If investors grow bullish again, a wave of IPOs could hit the market quickly. More than USD 20 billion worth of listings are awaiting release. However, the past few months have been littered with failed IPOs. Pushing against a rebound in the IPO market are the weak performance of earlier deals and investor concerns about the market.

Another hope for bankers is the window stays open until late December. That has happened before, but typically when the markets are strong and IPOs are flooding out.