Shanghai B-shares closed 1.8 percent higher Wednesday with sentiment buoyed by news the government will facilitate new B-share issues this year, dealers said.

The Shanghai B-share index added 2.55 points to 143.98 with turnover jumping to 35.12 million dollars from 10.56 million dollars previously.

The A-share index fell 19.62 points or 1.2 percent to 1,668.43 on turnover of 6.56 billion yuan (792 million dollars).

The State Development Planning Commission recently published a report pointing out the government should facilitate new share issues of domestic companies on H- and B-share markets this year and expand the scale of fund-raising on overseas markets, the China Securities Journal reported Wednesday.

An analyst from ABN AMRO Asia said: "Although new share issues will put short-term pressure on market liquidity, investors interpreted the news as a signal the government will give more support to the development of B-share markets."

There have been no initial public offerings (IPOs) on domestic B-share markets since the market was opened to domestic individuals early last year, dealers said.

However, some analysts doubted the rally would sustain long-term since the report did not give any specific instructions on the IPO policy.

"There is not real good news in the report and investors might cool down within a few trading sessions," said Southern Securities analyst Zosson Li.

Shares saw gains across the board and bicycle-maker Shanghai Phoenix topped B-share gainers, rising 3.8 cents or 4.2 percent to 93.4 US cents.

Textile company Shanghai Matsuoka saw the smallest increase among B-shares, up one cent or 0.6 percent to 1.62 US dollars.

The composite A- and B-share index closed 17.87 points down at 1,598.35.