Bank of China to raise up to $8.9bn in share issue

The Bank of China says it plans to raise up to 60bn yuan ($8.9bn;£5.9bn) by issuing new shares in Hong Kong and Shanghai.

It is part of a $42bn fund-raising effort by China's four biggest lenders, designed to boost their capital bases.
The Agricultural Bank of China is preparing for what is expected to be the world's largest share issue.
The banks have to boost their balance sheets after increasing lending as part of government stimulus measures.
The government has ordered them to keep more money in reserve after they embarked on a massive lending programme which left reserves out of kilter with loans oustanding.
"All the proceeds to be raised from the rights issue... shall be applied towards strengthening the capital base of the bank and to improve the capital adequacy ratio of the bank," Bank of China said.
Bank of China's shares were suspended pending the announcement.
The country's top two lenders, ICBC and China Construction Bank, have said they too have plans to raise extra funds.
World record Agbank, China's third largest bank, is in the process of boosting its funds by selling a 14% stake for $23bn (£15.3bn).
If that goes according to plan, it will become the world's biggest initial public offering (IPO).
The IPO, taking place in both Hong Kong and Shanghai, has fired investors' appetites.
So-called retail buyers - individuals - queued outside bank branches in Hong Kong to pick up the AgBank prospectus.
Major international investors have also expressed strong interest in AgBank.
UK-based bank Standard Chartered has said it will invest $500m in Agbank.
Qatar and Kuwait are already set to invest $3.6bn in the IPO.
Other likely investors include Singapore's sovereign wealth fund Temasek Holdings, Hong Kong businessman Li Ka Shing and Rabobank of the Netherlands.
Some observers think the two activities, which could suck in $30bn of investors' funds, will weigh heavily on the market.
Jin Lin, a Shanghai-based analyst at Orient Securities, told the Reuters news agency: "Bank of China's fund-raising plan would be another blow to an already fragile market, and could also sap demand for AgBank shares and drive down valuations of banking stocks,"
The issues are taking place against a background of stronger-than-expected economic growth in China.
The government raised its forecast of last year's growth from 8.7% to 9.1%.
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by news bbc