China Construction Bank slumps after BOA lifts stake

Nov. 19, 2008 (China Knowledge) - Shares of China Construction Bank Corp (CCB)<601939><939> Tuesday tumbled 5.60% to HK$3.88 on Tuesday after Bank of America (BOA) said it was exercising its option to increase its stake in the mainland lender, but at a significant discount to its current trading price. 

Investors also showed concerns that BOA may dispose of some of its existing holdings, which have become tradable after a three-year lock-up period that expired in October, in the coming quarters to shore up its own capital.

The U.S. lender announced on Monday it would increase its holding in the mainland third largest bank to 19.1% from 10.75% at the price of RMB 2.46 per share, or 1.2 times of CCB's third-quarter book value.