SASAC’s recent announcement that it will speed up the IPO process for the city’s SOEs is set to inundate local firms with capital markets work over the next twelve months.

The Shenzhen branch of the SASAC said that the scheme would, at this stage, only be opened to public utility enterprises that have stable profits and sound financials meaning companies like Shenzhen Grain Group, Shenzhen Duty Free Group, and affiliated companies of Shenzhen Investment Holdings Corporation are all possible IPO candidates. 

Despite the relatively small size of SOEs in Shenzhen—they are dwarfed considerably by those in Beijing, Shanghai and Tianjin—the announcement is good news for capital markets lawyers in Shenzhen. Lee Chun, managing partner of Grandall in Shenzhen, predicts that it will be the city’s local firm who will be competing for mandates as capital markets work becomes more commoditised .
"Legal services in relation to IPOs has been refined considerably. Work such as governance and compliance could be given to local firms due to the higher costs of firms from Beijing and Shanghai firms who have been dominated in Shenzhen’s IPO legal services market," he said.

According to Lee, this type of work could provide a platform for their growth. He says that local firms have made good inroads in improving their service standards over the last few years and an increase in SOE Shenzhen listings could see them increase their market share locally as well as regionally.ALB