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Unicom shares rise in Shanghai, Hong Kong on US$11.7b sale

[SHANGHAI] Shares of Unicom Group's key units in Shanghai and Hong Kong rose after China's second-largest wireless carrier announced a US$11.7 billion stock sale as part of a government push to draw private capital into its state-owned enterprises.

China United Network Communications Ltd, which has been suspended from trading since April, climbed by the 10 per cent daily limit to 8.22 yuan in Shanghai on Monday, while China Unicom (Hong Kong) Ltd opened 3.5 per cent higher to HK$12.36 in Hong Kong.

Though the Unicom deal will exceed the country's limits on private share sales, the China Securities Regulatory Commission said it will waive the phone carrier from the restrictions as the transaction is significant to China's efforts to reform its SOEs.

Unicom Group was among six SOEs picked by the nation's economic planner last year for a pilot program in mixed-ownership - China's preferred term for such private investments. Shares of some SOEs rose last week amid optimism other state enterprises will follow Unicom in attracting private capital as part of the government's broader push to overhaul a sector whose total revenue almost reached US$7 trillion last year.

Both the Shanghai- and Hong Kong-traded companies are units of unlisted China United Network Communications Group Co - also known as Unicom Group.

Unicom Group isn't alone in taking part in China's experiment with privatisation. In September, China's National Development and Reform Commission also picked China Southern Power Grid Co, Harbin Electric Corp, China Nuclear Engineering, China Eastern Air Holding Co and China State Shipbuilding Corp to take part in the pilot program. The idea of infusing private capital is meant to help bring in expertise needed to make state firms more efficient.