BANK of America Corp has sold US$2.8 billion of China Construction Bank Corp shares to replenish capital after completing the biggest financial-services acquisition announced in 2008.

　　China Construction Bank fell 8.8 percent in Hong Kong, the biggest drop in more than two months. Bank of America sold 5.62 billion shares in China's second-largest lender at HK$3.92 (50 US cents) apiece, a 12-percent discount on yesterday's closing price, according to a sales document obtained by Bloomberg News.

　　The largest United States bank is trying to take advantage of almost US$14 billion of paper profits from its China Construction Bank stake, after paying about US$33 billion to take over Merrill Lynch & Co. Shares of the Industrial and Commercial Bank of China Ltd and the Bank of China Ltd also fell as the sale fueled concern that other foreign investors will seek to raise cash from their holdings in Chinese lenders.

　　"Investors expect more sales to come," said James Liu, a Shanghai-based analyst at Sinopac Financial Holdings Co. "Bank of America and some other foreign strategic investors are just having too many issues on their home turf, and they have to find a quick way to raise cash." The Bank of America sale represents 13 percent of its stake in China Construction Bank. Bank of America invested US$3 billion in the Chinese lender in 2005 and has since been increasing its share. In November, Bank of America paid US$7 billion to almost double its holding to 19.1 percent.

　　"It's smart for Bank of America to take some profits," said Sean Ryan, an analyst at Sterne Agee & Leach. "The Chinese don't want a large part of the stake to be sold when the price of the shares has already declined significantly."

　　Since the initial investment, China Construction Bank has catapulted to become the world's second-largest bank by value, while Bank of America ranks the seventh.

　　China Construction Bank declined 36 percent last year in Hong Kong, while the benchmark Hang Seng Index fell 48 percent. Bank of America shares lost two-thirds of their value during the year, prompting the company to halve its quarterly dividend to 32 US cents a share.

　　Bank of America plans to be "a long-term and significant strategic investor in CCB," the US lender said in a November statement. The stock Bank of America bought in 2005 became eligible for sale in October, prompting analysts to suggest the US lender would sell part of its stake.

　　China Construction Bank has been notified of the transaction and understands that Bank of America sold the shares because of "its financial situation," the bank said yesterday. The companies will continue their strategic partnership, China Construction Bank said.