SHARES in Hong Kong and Shanghai tumbled yesterday in frenetic trading caused by uncertainty about China's banking system and fears of a deluge of new scrip. In Hong Kong, news of problems in China's banking system, coupled with rumours of patriarch Deng Xiaoping's ill-health, prompted selling by nervous investors, sending the Hang Seng Index tumbling two per cent, 156.94 points, to close at 7,388.42. In Shanghai, the impending listing of Tsingtao Brewery A shares spread gloom, as investors feared the issue would absorb too much capital and drag down prices. The Credit Lyonnais Securities (Asia) Shanghai A index lost 329.32 points, 5.74 per cent, to close at 5,411.6. Investors are already wary about the effects of a huge government sale of tickets for a lottery that would entitle those successful to buy new shares. Hong Kong brokers said a Sunday Morning Post report alleging that mainland bankers had siphoned off a staggering US$28 billion from state funds was a main factor behind yesterday's Hang Seng Index fall. Sun Hung Kai Securities research director Percy Au-young said: ''The news report triggered off worries as to whether there are any big problems in China's banking system.''