Shanghai's burgeoning initial public offering (IPO) market is shaking Hong Kong's status as the world's fundraising king and will challenge the latter's role as China's international financial center as the country moves toward a convertible currency, market observers said.

"It is certain that Shanghai will surpass Hong Kong in 2010 as the world's largest IPO center," said Terence Ho, strategic growth markets leader of accounting firm Ernst & Young.

Chinese companies are expected to raise $55.7 billion on the Shanghai Stock Exchange in 2010 while in Hong Kong the figure is expected to be $47.7 billion. Last year, Hong Kong raised approximately $30 billion in new listings with Shanghai's $27.3 billion closely behind, according to Bloomberg data.