B. of A. shares up 27% over last week as bank bolsters capital By Matt Andrejczak, MarketWatch SAN FRANCISCO (MarketWatch) — Bank of America said Monday it plans to sell 13.1 billion shares of China Construction Bank in another move to bolster capital on its balance sheet, an issue that’s been dogging the nation’s largest bank this summer. The private deal, slated to close in the third quarter, is expected to raise $8.3 billion in cash. Bank of America BAC +4.90% will retain a 5% stake in the Chinese bank after the transaction. “This sale of approximately half of our shares of CCB stock is expected to generate about $3.5 billion in additional Tier 1 common capital and reduce our risk-weighted assets by $7.3 billion under Basel I,” said Chief Financial Officer Bruce Thompson in a statement. Bank of America shares surged 5% to $8.13 in mid-morning trades Monday, making it the top gainer among major U.S. banks stocks. Better yet, the Chinese bank stock sale, which many investors had figured would eventually happen, follows on the $5 billion investment Bank of America got from Warren Buffett’s Berkshire Hathaway BRK.A +3.06% BRK.B +3.04% on Aug. 25. Read about Buffett’s $5 billion investment in Bank of America. This is calming jittery investors who had been selling Bank of America’s stock in droves from the end of July through mid-August. Over the last week, the shares have jumped 27%. On Monday morning, the financial sector was the top industry gainer on the S&P 500 SPX +1.69% . The Financial Select SPDR ETF XLF +2.78% , which tracks financial companies on the S&P, advanced 3% to $13.14. The KBW Bank Index BKX +2.78% , which consists of the nation’s 24 leading banks, moved up 3%. Citigroup C +3.62% rose nearly 4% to $30.92. Goldman Sachs GS +2.80% gained 3% to $115.22. J.P. Morgan Chase JPM +2.38% traded up 2% to $37.04 and Wells Fargo WFC +2.14% rose 2% to $25.17.

Source