BANK of Communications Ltd, the Chinese partner of HSBC Holdings Plc, gained in Shanghai on speculation that the London-based lender may increase its ownership.
BoCom rose as much as 9.5 percent before closing 2.5 percent higher at 14.02 yuan (US$1.87). The stock has advanced 77 percent since its debut on May 14, compared with 52 percent for the benchmark CSI 300 Index.
"HSBC is quite candid about its intention to raise its stake in BoCom and that has always been a catalyst for the shares," Li Jing, a Shenzhen-based analyst at Ping An Securities Co, told Bloomberg News.
HSBC, Europe's biggest bank by market value, paid US$1.75 billion for 19.9 percent of BoCom in August 2004. Its stake was diluted to 18.1 percent after the Chinese bank sold 3.19 billion yuan of shares on the Chinese mainland in May.
HSBC, which gets about two-fifths of its profit from Asia, has said it wants to return its holding to the original level. It also has an option taking effect from August 2008 to lift its stake to 40 percent should Chinese rules permit.
Li said BoCom's shares also are benefiting from the bank's lower bad-loan legacy than rivals and a branch network in wealthy cities. BoCom has more than 2,000 outlets in 28 Chinese provinces.