Foreign banks may divest China stakes

International investment banks may be preparing to sell their stakes in Chinese mainland banks after the government mandated lockup periods expire to shore up their depleted capital resources, said analysts.

"Investment banks may be in immediate need of capital, forcing them to sell shares in Chinese mainland banks as soon as it is legally permitted. That would put mainland banks under short term selling pressure," said Dick Lee, corporate finance officer, Phillip Securities.

Conita Hung, head of equity markets at Delta Asia Financial, said some of the investment banks, however, may hold their shares, to help secure their future growth on the mainland.