China Construction, the nation's third-biggest bank, today said it may sell 9 billion shares in Shanghai. The company's Hong Kong stock rose 3.3 percent to HK$4.69 (63 US cents) yesterday. Also today, China Cosco Holdings Co announced plans to raise up to US$1.98 billion in Shanghai, Bloomberg reported.

The government, concerned that a market bubble is building, wants Chinese companies that went public Hong Kong to sell shares on the mainland to increase the supply of equity and damp speculation in smaller stocks. China's state-owned banks have been key to that push, raising US$9.3 billion at home this year.

``The government set a target at the beginning of the year and is clearly speeding up the process now to stabilize the market,'' said David Liao, who helps manage 1.4 billion yuan at HSBC-Jin Xin Fund Management Co. ``Companies like CCB aren't really short of capital.''

Related readings:  Construction Bank profit dips 1.7%  Listed banks report net profits up 34%  CCB 2006 profit falls Find more in Markets Watch

China's CSI 300 Index is the world's second-best performing benchmark this year, returning 104 percent in dollar terms. Stocks have risen too far, too fast and a stock market correction is looming, former Federal Reserve Chairman Alan Greenspan said last month.

The securities regulator wants so-called red chip companies -- those incorporated abroad with assets in China -- to sell shares in Shanghai or Shenzhen, the official Securities Times reported May 17.

Other red chip companies include China Mobile Ltd, the world's largest mobile-phone carrier by users; CNOOC Ltd, China's biggest offshore oil explorer; and Lenovo Group Ltd, the world's third-biggest personal computer maker.

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