Shares in Bank of China (3988.HK, 601988.SHA) slid in Hong Kong and Shanghai markets yesterday on concerns that a convertible bond issue will dilute shareholders’ stakes, Bloomberg reported. Shares on the Shanghai exchange tumbled 5.1% to RMB3.89 (US$0.59), recovering from a 7.6% decline, the steepest drop in nine months. In Hong Kong, stock fell 0.8%. BoC is selling US$5.9 billion worth of covertible bonds to replenish its reserves after a year of record lending. The bank’s capital adequacy ratio fell below the minimum 11.5% required by regulators to 11.09% in March. The bonds can be converted to A-shares six months after issuance at RMB3.88 per share. The increase in outstanding stock will dilute earnings per share. Shareholders approved the bond sale and allowed BoC to sell up to 20% of its outstanding shares in both markets if necessary.