Royal Mail investors bank £356 profit as shares start trading and government faces renewed accusations of selling business too cheap - but the price may be higher by December
Those who sold today made a paper profit of £356 on their original £750 outlay - a 48 per cent rise
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Tuesday 15 October 2013
Royal Mail shares shot up in value in their first full day of trading today, despite a rush of retail investors to sell their holdings.
The Government faced renewed accusations of selling the business too cheap as the shares rocketed from their sale price of 330p to a new peak of 490p.
Although retail investors who bought shares through their brokers had been able to trade last Friday, today was the first time the thousands who bought directly from the Government’s website could trade.
Thousands of trades went through in bundles of 227 shares – the precise amount that retail investors were allotted. That was seen as proof that many investors were rushing to sell their entire holdings and book their profits. Those who sold today were booking in sitting on a paper profit of £356 on their original £750 outlay - a 48 per cent rise.
Royal Mail chief executive Moya Greene who opened official trading in the shares at the London Stock Exchange today, said: “This marks the exciting next phase in our company’s long and proud history. With the support of our new shareholders, we are in a strong position to move forward, to compete effectively across our markets and to grow our business.”
David Buik, veteran market-watcher now at Panmure Gordon, described Royal Mail’s opening as “very sprightly.” Before the opening, 185,000 shares went through at 476p, thanks to strong institutional demand. “After 20 minutes the share price stood at 485p with 3.6 million shares having changed hands,” Buik added. “This is hardly surprising. Forget retail operators for a minute - only 300 institutions out of 800 who applied were given any allocation.”
But there were also scores of sales going through of 227 shares, which was the allocation given to any retail investors who applied for £10,000 or less of stock.
The shares are set to rise still higher if, as is expected, Royal Mail joins the FTSE 100 at the next reshuffle in December. That would see tracker funds buying up the stock.
The price surge came despite postal workers pushing ahead with plans for strikes in the run-up to Christmas. The result of a strike ballot by more than 115,000 members of the CWU union will be announced tomorrow. Union sources are demanding that Royal Mail bosses offer new terms and conditions for staff, and could strike as early as next week.
- 1 Rape threats, death threats and a police investigation after video poking fun at an Islamic Party in Malaysia goes viral
- 2 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 3 Gamers confess the worst things they've done in The Sims
- 4 6-year-old writes ice cold Valentine's card to his stepmother
- 5 Syrian child photographed 'surrendering to camera because she thought it was a gun'
Rape threats, death threats and a police investigation after video poking fun at an Islamic Party in Malaysia goes viral
Why Robin Williams safeguarded himself against a morbid trend in advertising
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
6-year-old writes ice cold Valentine's card to his stepmother
Jeremy Clarkson to become 'special adviser on transport' to David Cameron
Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
Revealed: Putin's army of pro-Kremlin bloggers
Katie Hopkins reported to the police for race hatred by Labour MP Simon Danczuk after tweet about Pakistani men
iJobs Money & Business
£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...
£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...