Shanghai shares close higher

Shanghai shares closed higher today as market sentiment rose on news that pension funds have started to flow into the stock market and also on progress in the on-going mixed-ownership reform in state-owned enterprises.

The Shanghai Composite Index gained 0.56 percent to close at 3,286.91 points today.

Investor sentiment was buoyed that eight provinces and cities have invested the first tranche of 172.15 billion yuan (US$25.8 billion) of pension funds in the stock market, Securities Daily said today.   

Joyoung, China’s biggest maker of soybean-milk machines, soared 10 percent to 20.13 yuan and Yantai Zhenghai Magnetic Material jumped 10 percent to 11.83 yuan yesterday. The two companies’ interim results showed China’s pension fund has emerged as their major shareholders in the second quarter.

“The pension funds which flow into the A-share market are going to stabilize the market,”said Li Chao, chieif analyst at Huatai Securities, adding that the funds are "also going to enhance market liquidity.”

Investors were also buoyed by progress made to mixed-ownership reform in state-owned enterprises.

China Unicom, the country's second-biggest telecommunication company, today announced it plans to draw strategic investors such as Alibaba Group, Tencent Holdings and Baidu under its SOE reform.

China Unicom surged by the daily limit of 10 percent to 8.22 yuan (US$1.23).

Other gainers included Aluminum Corporation Of China Ltd adding 7.54 percent to 7.27 yuan and Hangxiao Steel Structure Co Ltd rising 6.56 percent to 13.65 yuan.