Market Report: Chancellor cashes in on Royal Mails rise

 

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The Independent Online

The recent rise in Royal Mail shares has not gone unnoticed by George Osborne, with the Chancellor deciding to cash in on the postal service’s 22 per cent rise in 2015.

Plans have been revealed to sell the Government’s remaining 30 per cent stake in the group and the timing of this sale will come under intense scrutiny after MPs were accused of selling off Royal Mail on the cheap in 2013.

To recap, Royal Mail listed at 330p, raising £2bn for the Government. The shares raced past 600p in the space of a few months, leaving question marks over the decision to float the company at that price when the demand was there.

Royal Mail, down 26p or 4.9 per cent to 500p, has thrived in 2015 while its postal rivals, including Whistl, formerly TNT Post, have suffered.

The FTSE 100 closed 91.22 points lower at 6,859.24, with Greece still firmly in the spotlight and a possible debt default now just a day away.

Europe’s green drive has helped catalytic converter maker Johnson Matthey’s profits race ahead but concerns about its soaring debts meant it was the biggest faller on the top flight, down 185p to 3,331p.

Bank of America Merrill Lynch upgraded B&Q owner Kingfisher, helping the shares up 9.8p to two-month highs of 377.9p. The broker picked out an improving B&Q, Screwfix powering ahead and some green shoots in France as reasons to be hopeful.

On the mid-cap index, Moneysupermarket.com, down 30.3p to 275.8p, spooked the market by admitting it may have been drawn into an inquiry into the energy market.

The price comparison site revealed that energy watchdog Ofgem had asked it for information.

Rival uSwitch, owned by online property website Zoopla, down 14.6p to 260p, has received the same request.

South32 dipped 3.75p to 106.5p as word spread that Mick Davis is no longer keen on swooping for the BHP Billiton mining spin-off for his cash-rich and asset-hungry X2 venture. Fishing tackle retailer Fishing Republic made a splash on its first day on AIM, finishing 2p higher at 17p.

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