BANK of Communications Ltd, part-owned by HSBC Holdings Plc, said the number of yuan-denominated shares tradable in China will rise almost seven-fold on Friday when the lock-up period for 13.2 billion shares expires.
China Life Insurance Co Huarong Asset Management Co and State Grid Co are among institutional investors and strategic shareholders who will be allowed to sell part of their holdings bought during the company's initial public offering in Shanghai in May 2007, the lender, also known as BoCom, said in a statement to the Hong Kong stock exchange yesterday.
BoCom's shares have dropped 39 percent in Shanghai this year as China's equity market bubble collapsed and as concerns increased that the government will strengthen curbs on lending and money supply to cool inflation. The stock has been the worst performer among the nation's 14 publicly traded lenders. BoCom's' Hong Kong-listed shares have dropped 2.6 percent in the same period, Bloomberg News said.
The shares rose 1.27 percent to 9.54 yuan (US$1.37) in Shanghai yesterday, the first gain in six trading days.
Institutional investors bought shares in the bank's IPO 12 months ago at 7.9 yuan while corporate investors bought their stakes at book value several years ago.
The equity that will become tradable on Friday represents 27 percent of the bank's total outstanding shares.
A further 10.45 billion shares remain non-tradable, the bank, China's fourth-largest by market value, said yesterday.
HSBC, Europe's largest bank by market value, increased its ownership in BoCom to 19 percent from 18.6 percent after buying 172.5 million shares on the open market in Hong Kong for HK$2.16 billion in October.