"Merchants Bank Rises in Hong Kong on $2.6 Billion Share Sale | AboutHK.Com - more information about HK"
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| Bloomberg  China Merchants Bank Co., the nation’s fifth-biggest lender by market value, rose in Hong Kong trading after saying it plans to raise as much as 18 billion yuan ($2.6 billion) in a rights offer to shore up capital.
The stock jumped as much as 5.4 percent, its biggest gain since June 26, and was up 3.8 percent at HK$18.40 as of 10:50 a.m. local time. The bank’s shares in Shanghai fell 1 percent to 17.55 yuan, equal to the decline in the Shanghai Composite Index.
China’s banking regulator has urged publicly traded lenders to raise their capital adequacy ratios to 12 percent by the end of this year to help them withstand the impact of the global financial crisis.
“China Merchants Bank’s growth is severely constrained by its weaker capital position,” said Liu Yinghua, a Shenzhen- based analyst at Ping An Securities Co. “The market has expected and should welcome this fund-raising plan.”
Merchants Bank, which posted a 33 percent decline in first- quarter profit, had a capital adequacy ratio of 10.95 percent as of March 31, the lowest among the nation’s six publicly traded banks in Hong Kong.
Merchants Bank will sell as many as 3.8 billion shares to owners of existing Shanghai-listed A-shares and Hong Kong-listed H-shares, the company said in a statement to the Shanghai Stock Exchange late yesterday.
The price and timing of the rights offer haven’t been decided.
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