Market Report: Government wastes no time in banking its Royal Mail profit

The Chancellor also announced last that up to 1 per cent of its remaining stake will be given to Royal Mail staff

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The Independent Online

The Government wasted no time in banking its Royal Mail profit. Just a few days after unveiling the blueprint for a sale of the country’s 30 per cent stake, George Osborne has chosen to offload half of that now, leaving it with 15 per cent of the company, up 5p to 516.5p.

The disposal will be a placing to institutional investors, with the price to be determined by an accelerated book-building process.

“Current market conditions represent a good opportunity to achieve value for the taxpayer,” a spokesperson for the Department of Business said.

The Chancellor also announced last that up to 1 per cent of its remaining stake will be given to Royal Mail staff.

The FTSE 100 rose along with global markets as equities rallied after a torrid start to June.

The UK’s benchmark index finished 76.47 points higher at 6,830.27, with only four blue chips finishing in the red.

Sainsbury’s, up 11.3p to 260.3p, recorded its sixth straight quarter of falling sales but the decline this time was not as bad as feared. That also lifted rivals Tesco, up 9.35p to 211.45p, and Morrisons, up 8.5p to 179.9p.

Grocery delivery company Ocado also benefited from the sector’s recovery, enjoying a 20.6p rise to 382.6p on the mid-cap index.

Investors cheered’s first-quarter results, which showed a 35 per cent jump in sales for the online clothes retailer to £41.3m. The AIM-listed company rose 3p to 29p, although that is some 17p shy of Investec’s bullish 46p target price. Shoe Zone, another AIM retailer, leapt 11.5p to 174.5p despite a 5.7 per cent fall in revenues. The decline was flagged in April.

The spark has gone from LED lighting specialist Dialight, which blamed the oil and gas sector’s troubles for a sharp slowdown in orders. Shares tanked 220p to 525p as the company unveiled a strategic review of the business.

David Lenigas’s UK Oil & Gas fell 0.075p to 2.43p as the company, which is leading the hunt for oil near Gatwick Airport, took advantage of last week’s share price rise to raise £4.5m at 2.25p.