CCB shares slip amid report BofA may reduce stake

[May 06, 2009]  HONG KONG (AP) -- Shares of China Construction Bank Ltd., the country's second-biggest commercial lender by assets, slid Wednesday on worries Bank of America may sell part of its stake in the company to cope with mounting losses.

The Chinese lender fell 0.4 percent to close at HK$4.75 in Hong Kong trade. It shares are up almost 12 percent for the year.

Bank of America, which owns about 17 percent of the common shares of the Chinese bank, is considering selling about a third of that, or roughly $8 billion worth, the Financial Times reported Wednesday, citing people familiar with the matter.

The U.S. bank has been warned by federal regulators conducting "stress tests" on major lenders that it will need to raise around $35 billion to plug a capital shortfall, according to a Wall Street Journal report based on unidentified sources.

Results of the tests are expected to be released Thursday.

A number other Western financial institutions, including American Express Co. and German insurer German Allianz AG, have sold off some of their holdings in Chinese banks to raise cash amid the global financial crisis.

[Associated Press]

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