China Construction Bank block raises $52 million

An undisclosed investor yesterday sold HK$405 million ($52 million) worth of shares in China Construction Bank (CCB). The UBS-arranged block trade, which was launched during the lunchtime break, was said to have been snapped up by a handful of Asian investors in less than a minute.

A total of 100 million shares were sold at a fixed price of HK$4.05 each, representing a 2.9% discount to the morning session closing price of HK$4.17. CCB's shares gained 4.8% on Friday, and even after yesterday's sale, they continued to rise -- finishing 2.9% higher at HK$4.20.

The speed at which the deal was completed and the tight discount was obviously a function of the size, with the offering accounting for less than a quarter of the daily trading volume over the past three months. Some market participants even questioned why the deal was done as a block trade at all, rather than dribbled out into the market during the course of the day. On a strong day like yesterday when the Hang Seng Index rose 3.6% and the counter itself was up 2.9% this should have been no problem, they say. Most of the day's gains in the overall market did, however, come in the afternoon session, after the CCB deal was already completed, with the HSI having finished the morning session with a more modest 1% gain.