A TOTAL of 2.53 billion of yuan-denominated shares of China Merchants Bank Co., the nation’s fifth-largest by market value, will become tradable this week as their two-year lockup period expires.

Shanghai Automotive Industry Corp., CNOOC Investment Co. and 75 other institutional investors will be allowed to sell part of their holdings in the Shenzhen-based bank Wednesday, representing 17 percent of total outstanding shares.

China Merchants Group Co. and 12 other institutional investors still have 4.8 billion non-tradable shares subject to one more year of lockup.

Shares of Shanghai-listed China Merchants Bank had dropped 21.77 percent as of Friday this year on concerns that a lending curb imposed by the government will hurt profit in 2008. The lender posted a 110 percent jump in net income in 2007 on higher loan growth and fee income.

The mainland’s publicly traded firms started a mandatory program in 2005 to make more than US$200 billion of mostly State-owned equity tradable.

Under the reform, most holders of non-tradable shares committed not to sell their holdings for at least two years while the rest agreed to a lockup period of three years.

China Merchants Bank implemented the reform in February 2006. (SD-Agencies)