It may be only January, but investment bankers already have the champagne on ice as they predict this year will be a record for initial public offerings. Financiers say the money companies raise on the main board this year will easily surpass 2007, when the cash firms raked in from stock sales hit a record HK$290 billion. Edward Lam, the head of Hong Kong investment banking at Citi, said the number of companies he knew preparing for Hong Kong stock sales was 'massive'. 'We would expect the value of Hong Kong equity offerings to set new records this year,' he said, adding this was partly because some companies were planning mega deals. United States insurer American International Group is planning to list its Asian unit American International Assurance in Hong Kong, raising up to US$20 billion. Agricultural Bank of China, the only one of the mainland's Big Four commercial lenders not to have gone public, is also rumoured to be planning a huge stock sale in Hong Kong and Shanghai which bankers say could also raise US$20 billion. Lam said many mainland firms were preparing to go public because the stock market had soared and company owners expected to get high valuations for their businesses. The price-earnings ratio on the Hang Seng Index has risen from a trough of 6.55 times in October 2008 to 23 times yesterday. Richard Winter, a deputy chairman of Hong Kong-based Quam Financial Services Group, said many mainland companies would also have no choice but to seek funding from Hong Kong investors because Beijing was likely to force banks to restrict corporate lending this year. 'There is likely to be a steady stream of mainland companies looking to the Hong Kong equity markets this year to finance their growth with equity capital in the scarcity of alternative sources of funding,' he said. Mainland banks lent more than 9 trillion yuan (HK$10.22 trillion) to companies last year under government orders to stimulate the economy. But last week, the central bank governor warned lenders to be more careful about which businesses they lent to, in a bid to prevent a surge in bad debts. 'We will also get more international companies listing in Hong Kong. The market has obviously opened up to them,' Lam said. Russian aluminium company Rusal is marketing a HK$20.13 billion stock sale, while Canadian coal miner SouthGobi Energy Resources wants to raise US$465 million. If the rush of activity Hong Kong's eternally optimistic financiers are predicting transpires, it may soon be time for retail investors to sell out of the Hang Seng Index. A glut of firms selling shares on the exchange can signal the top of a bull market. In the final leg of the last long-term market rally, when the index rose 55 per cent from January to October 2007, 60 firms raised funds through share offers, against 54 for the whole of 2006. Accounting firm Ernst & Young has also predicted new listings will hit a record this year, guessing the value will reach HK$370 billion.