Shares in Shanghai and Hong Kong tumbled yesterday as investors snapped up two newly listed mainland construction groups while selling down the rest of the market following reports China's central bank might rein in bank lending.
Shares in China State Construction Engineering rose by as much as 90 per cent on their debut before closing 56 per cent stronger in Shanghai. China's largest home builder had last week raised Rmb50.2bn ($7.34bn) in the world's largest initial public offering since Visa raised $19bn in March 2008.
The surge of funds into the market has reignited fears of a new bubble forming in both the property and share markets. The Shanghai Composite index has doubled since it hit bottom late last year, beating all major indices around the world.