AgBank shares up as Morgan Stanley lifts stake

HONG KONG (Reuters) - Hong Kong-listed shares of Agricultural Bank of China (1288.HK) rose more than 4 percent on Friday morning after Morgan Stanley (MS.N) lifted its stake in the Chinese lender's H shares by about 1 percentage point.

Morgan Stanley raised its holding in AgBank's H-shares to 16.31 percent from 15.28 percent earlier this week, according to data on the website of the Hong Kong stock exchange.

"This has helped boost confidence among retail investors that the bigger players are interested in buying into the bank," said Jonathan Siu, an analyst at Core Pacific-Yamaichi in Hong Kong. "There was some uncertainty during the first couple of days, but this has helped improve sentiment."

At the midday trading break, AgBank H shares were up 3.6 percent at HK$3.42 after hitting an intraday high of HK$3.45. The benchmark Hang Seng Index .HSI was up 1.09 percent.

AgBank's (601288.SS) Shanghai-listed A shares were up 3.3 percent at 2.82 yuan, beating the Shanghai Composite Index's .SSCE 0.38 percent advance.

Morgan Stanley, and rivals Deutsche Bank AG (DBKGn.DE), Goldman Sachs Group Inc (GS.N), JP Morgan Chase & Co (JPM.N), Macquarie Group (MQG.AX) and China International Capital Corp (CICC), handled AgBank's Hong Kong offering that raised about $10.5 billion.

While it is common for underwriters to buy the shares of a company they helped list, only Goldman Sachs has received the mandate to stabilize AgBank shares during the first month following its offering, according to the lender's prospectus.

AgBank made modest debuts in Hong Kong and Shanghai last week, reflecting wider concern over valuations and investor cautiousness amid market volatility.

Its price of HK$3.42 midway through the Hong Kong trading day represents a near 7 percent increase from its IPO price of HK$3.20 per share.

(Reporting by Kelvin Soh and Kennix Chim; Editing by Chris Lewis)