AgBank China lockup ending over 5bn Shanghai shares

SHANGHAI: Agricultural Bank of China, one of the country's "Big Four" lenders, said on Friday that the lock-up period on over 5 billion of its Shanghai-listed shares would be ending next week, potentially unleashing a high number of shares onto the market.

The July 15 end of the lock-up period for half the shares sold to strategic investors who participated in AgBank's massive initial public offering last year will see its freely floated shares in Shanghai rise by a third, to 20.5 billion shares.

AgBank's yuan-denominated A-shares closed up 0.8 percent at 2.69 yuan on Friday, putting the value of the shares that will become freely tradable at 13.8 billion yuan ($2.1 billion).

That could put further pressure on the bank's share price, which is currently below its debut price of 2.74 yuan.

The end of the lock-up will also be an issue for AgBank's Hong Kong-listed shares, with potentially $6 billion worth of shares hitting the market there.

Chinese bank shares have already been under pressure out of concern over economic tightening policies and growing fears an overhang of loans by local governments could turn into a mountain of bad debt.

COPYRIGHT REUTERS, 2010