OVERNIGHT lending rates were forced up to five per cent yesterday as investors rushed to borrow funds to buy into what is tipped to be Hongkong's biggest share oversubscription yet. The flotation of China-play Denway, for which subscriptions close at midday on Wednesday, is widely tipped to be at least 500 times oversubscribed, tying up $200 billion in funds to raise just over $400 million. Denway's shares, which have a subscription price of $1.22, were being quoted at $2.90 by one broker in the grey market yesterday. China Travel Service, which listed on the Hongkong exchange last November, was 411 times oversubscribed, attracting almost $150 billion worth of funds in what was the largest oversubscription to date. HSBC treasurer Chris Pavlou believed that interbank rates for overnight funds had peaked at five per cent, a full percentage point above the offered rate at the the Exchange Fund's discount window. ''It is a question of recycling the money,'' he said. ''Three or four years ago this would have upset everybody, but the market is more mature now.'' Smaller banks, however, grumble that they do not hold government securities to use as collateral at the emergency lending facility and thus are forced to pay the higher rates to borrow in the interbank market. Exchange Fund deputy director Norman Chan said there had been no significant pressure on the Hongkong dollar exchange rate against the US dollar. ''We will monitor the system closely, and if necessary we will take the proper steps,'' he said. Commissioner of Banking David Carse said overnight rates of five per cent paled into insignificance when compared with those seen in some European countries, reaching several hundred per cent. ''I don't think it's a big deal,'' he said. During the China Travel flotation, the Exchange Fund had to extend the opening time of its liquidity adjustment facility by 30 minutes, and interbank money rates shot up to 5.5 per cent from 3.5 per cent in a day.