From left, the flags of the Hong Kong Stock Exchange, China and Hong Kong are seen flapping in the wind on May 6, 2019.

Hong Kong's initial public offering (IPO) market has been hit badly by the unrest in the city, plummeting nearly 43% in proceeds year to date. But it could see a turnaround soon, analysts say.

The city has "witnessed a slow period" for IPOs this year, said financial data company Refinitiv. It has raised $18.5 billion in proceeds so far, down 42.8% as compared with the same period last year, said its senior analyst Elaine Tan.

The months-long protests over a now-withdrawn extradition bill have kept investors and companies away, with billions of dollars said to have been pulled out already, Reuters reported, citing a recent estimate by Goldman Sachs. The city's benchmark Hang Seng index has tumbled since the protests began in June.

Amid the turmoil, Reuters reported that Chinese giant Alibaba postponed its up to $15 billion listing. The Wall Street Journal reported Saudi Arabia's state oil giant Saudi Aramco was said to switch its preference from Hong Kong or London to Tokyo as the international destination to list its shares.

"Investor sentiment in Hong Kong is quite low as demonstrations continue as they have become smaller but more violent," said Brendan Ahern, chief investment officer of KraneShares, an investment firm known for its China-focused ETFs.

"The demonstrations have had a material negative effect on the local economy as tourists avoid the city which hurts hotels, restaurants and retailers. IPOs tend to ride investor enthusiasm which is lacking in Hong Kong today," he added.

He added that AB InBev's Budweiser APAC listing in September — the second-largest this year after Uber — bucked the trend as it tapped on investor enthusiasm for Chinese liquor and alcohol investments. It was the brewing giant's second attempt this year after the first one failed due to what it called "several factors, including the prevailing market conditions."

But, all might not be lost. "A robust IPO pipeline is anticipated to reverse the listing drought witnessed in the last two months and continue to show Hong Kong's resilience as one of the best venues for initial public offerings," said Refinitiv's Tan in an email to CNBC.

She noted logistics firm ESR Cayman's up to $1.45 billion IPO, which was pulled in June, but relaunched on Monday and set to begin trading Nov. 1. That could be Hong Kong's second-largest listing this year, after the Budweiser IPO.

Chinese sportswear retailer Topsports International also launched its IPO in October, raising $1.01 billion as it began trading on the Hong Kong stock exchange. That contributed to an uptick in Hong Kong IPOs for the month, during which 11 deals raised $1.4 billion, as compared with just six new listings in September, said Tan.

Other upcoming listings in Hong Kong include financial institution Home Credit's up to $1.5 billion IPO and Bank of Guizhou's up to $1 billion listing.

Hong Kong's fortunes could turn around further if the U.S. really moves to place curbs on investments in China, which Washington reportedly considered amid its trade fight with Beijing. One of the measures under consideration reportedly included delisting Chinese stocks in the U.S., though the Trump administration pushed back on those reports and said it was "not contemplating" such a move at the moment.

"If capital controls on Chinese companies listing in the United States were to be implemented, Hong Kong would be a major beneficiary," said KraneShares' Ahern.

EY's Ringo Choi said with that development, it could be a better move for Alibaba to list in Hong Kong, as it's likely to have the added benefit of China's backing.

"If they come to Hong Kong, there's a high chance that Chinese state-owned companies would buy into Alibaba," Choi, EY'S APAC IPO leader, told CNBC via a phone interview.

Shares of Alibaba, Baidu and other Chinese companies had plunged following those reports of possible U.S. curbs on investments in China. Alibaba and Baidu stocks have since recovered.