Shares in mainland-backed banks soared yesterday, fuelled by rumours a 20 per cent stake in China Everbright Bank will be injected into its Hong Kong-listed stablemate, China Everbright-IHD Pacific.
Yamaichi International associate director Terry Cheng said investors were speculating the banks could be poised to buy more assets.
Analysts said if approval were given for the sale of an interest in Everbright Bank to Everbright-IHD, it could set a trend for banking reform in a sector over which Beijing had been keen to maintain a tight grip.
Ka Wah Bank, 61.3 per cent controlled by Beijing-based China International Trust & Investment Corp (Citic), saw its shares rise 92.5 cents, or 19 per cent, to close at $5.90 yesterday.
This was despite the bank's claims it was not aware of the reason for the price rise. It told the stock exchange no negotiations or agreements were under way relating to intended acquisitions or sales.
Union Bank, which is about 60 per cent owned by China Merchants Holdings, saw its shares add $1.35, or 9 per cent, to $16.
Shares in International Bank of Asia gained 30 cents, or 5.6 per cent, to $5.60. It is 20 per cent held by Everbright-IHD.