Money

China's CCB says parent Huijin backs rights issue

(Agencies)
Updated: 2010-06-22 13:47
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China Construction Bank, the world's second-largest lender by market value, said on Monday that its State-owned parent Central Huijin would fully participate in its rights issue.

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CCB's statement of Huijin's support, issued to the Shanghai Stock Exchange, comes ahead of a shareholder meeting on Thursday that will vote on whether to approve the $11 billion fundraising plan.

CCB Chairman Guo Shuqing had said last month that the bank may push pack its capital-raising to early next year due to uncertain market conditions.

CCB is 12 percent owned by Bank of America and 6 percent owned by Singapore state investor Temasek.

Huijin, an investment arm of China's sovereign wealth fund, had said early in May that it would back multibillion dollar fundraising plans by China's big state-run banks, which are replenishing their capital after a lending boom last year in support of the government's economic stimulus efforts.

The fund-raising plans have weighed on the stock market, however, where the benchmark index has fallen more than 20 percent this year and is one of the worst-performing major world markets.