Shares in China Construction Bank Corp rose yesterday on speculation the widely expected imminent stake sell-down by Bank of America Corp would mainly take the form of a private placement to prevent a flood of shares in the secondary market.
CCB's Hong Kong-listed shares rose 7.37 per cent before closing up 5.05 per cent at HK$4.99. Its Shanghai-listed A shares rose 1.99 per cent to 4.61 yuan (HK$5.24).
The rally came on the expiry of the lock-up period for 13.5 billion CCB shares held by Bank of America, which is struggling to shore up its capital as required by Washington.
Bank of America might sell all those freed-up shares, which made up about one-third of its 16.73 per cent stake in the mainland lender, sources have said.
Analysts said the rally was also a result of institutional investors covering their short positions after rumours the imminent sell-down would be only for a few investors.
'The stock rally was mainly due to the positive news flows, as most shares [to be placed] would go to some powerful names through a private placement,' said Matthew Kwok, the head of research at brokerage Tanrich Financial.
Cash-strapped financial giants in the United States and Europe have been exiting their positions in Chinese banks over the past few months, in some cases through private placements to well-known investors.
