Australia's CBA shares slump after share sale

CBA, Australia's second-largest lender, sold 52.6 million new ordinary shares at A$38 each, a discount of nearly 16 percent to its last traded price on Oct 7.

CBA shares closed 6 percent lower at A$42.40, clawing back about half of their early losses and ending well above the placement price. The stock was suspended from trade on Wednesday pending details on the share sale.

By comparison, since Tuesday, shares in its three main rivals have fallen between 7.6 percent and 8.7 percent.

"It's actually primarily in line (with other banks), and might have even done a fraction better. It did not trade yesterday when the rest of the market fell 5 percent. So a starting point to Commonwealth, just to move in line with the market, was minus 5 percent," said Angus Gluskie, portfolio manager with White Funds Management.

"They did the placement at A$38, the current price is A$42.40, so I wouldn't have said it was a bad day for them," Gluskie said.

CBA sold the new shares to help to pay for its A$2.1 billion takeover of British bank HBOS's Australian unit BankWest, which will boost its market share in fast-growing Western Australia. The bank sees more acquisition opportunities in Asia emerging out of the global credit crisis, with bank valuations likely to fall further, chief executive Ralph Norris told Reuters on Thursday.

"At the moment we still see prices for Asian banks being very strong, by comparison with what's happened in other markets, but I would suspect that the price of banks in Asian markets will soften if this crisis goes for an extended period. That could create opportunities," Norris said.

Shares in Commonwealth have fallen 28.2 percent so far this year as part of a global equity market rout, but it has outperformed its three largest Australian competitors. Australia and New Zealand Banking Group has fallen 39.4 percent, National Bank of Australia is down 37.2 percent, and Westpac Banking Group has taken a 23 percent hit since the start of the year. ($1=A$1.50) (Reporting by Mette Fraende and Sonali Paul; Editing by Kim Coghill)