Mainland brokerages are playing a bigger part in underwriting shares issued by Chinese companies for foreign investors. Shanghai Securities News said this was because China houses - after about five years of experience - were able to take on foreign brokerages in underwriting B shares, reserved for foreigners but actively traded by mainland investors. It pointed to the case of Shanghai Huili Building Material, which issued 80 million B-share underwritten by nine brokerages, four of which were China houses. China Guotai Securities alone accounted for half of the issue. Mainland houses underwrote 37.5 per cent of the B-share offer by Tianjin Marine Storage and Transportation, and 60 per cent of the Gujing Gongjiu Industry offer. Foreign analysts said a reason why mainland houses underwrote a big chunk of these three issues was that foreign brokerages were not chasing the business. 'It is true the mainland broking houses have improved markedly these few years, but one reason they did more of the business in these issues was because foreign brokers were less interested in them,' one foreign analyst said. Mainland brokerages dominating the underwriting business include big names such as Huaxia Securities, China Guotai Securities, Shanghai Shenyin Securities, Nanfang Securities, and Haitong Securities. 'These brokerages need to expand their business, and underwriting B-share issues is one way,' Wu Yifan , research manager at Shenyin Securities, said. If a public issue is big, as in Shenergy's imminent B-share offer, then the company would want more foreign houses in its underwriting syndicate to ensure successful placement overseas. Foreign houses compete very aggressively for those issues that they think will appeal to foreign investors. Shenergy - which will sell 600 million B shares after September to raise funds for its energy projects - had more than 10 prominent foreign brokers knocking on its doors, before it finally settled on Morgan Stanley as its global co-ordinator and Shanghai Shenyin Securities as the lead underwriter. Because of the issue size, the largest to date, the company has included other foreign houses in the underwriting syndicate to ensure that the sale is well placed. Hoong Yik Luen, chief China strategist for Sassoon Securities, said: 'There are 1,001 reasons why local houses choose to underwrite certain new issues when foreign houses are not very keen. 'Sometimes, it is because the company seeking listing has some direct or indirect links to the brokerage which gets to underwrite the deal.' Local companies began participating in B-share issues in 1992.