Strong debut for Norwich Union

Norwich Union shares jumped to an early premium to the 290p strike price of its pounds 2.4bn share offer yesterday, netting immediate profits for new shareholders despite a fall in the market as a whole. The shares closed at 324.5p after reaching 356p in early trading.

The strong debut for the shares meant almost 3 million former members of the life and general insurance group received windfalls worth an average pounds 1,300. Members who received the minimum 300 share handout have a share stake worth just under pounds 1,000.

Many members received far more than that, depending on the size of their insurance or pension policies. Around 1.1 million non-profit policyholders received 150 shares, which were worth just over pounds 500 at yesterday's closing price.

The Norwich windfalls are the latest instalment in a summer of handouts which are estimated to be injecting more than pounds 30bn into the British economy, raising fears that interest rates will have to be increased more than would otherwise be the case in order to restrain consumer demand.

With nearly 150 million shares changing hands, Norwich Union was easily the day's most actively traded stock. Wilder predictions that the shares might push towards 400p proved unfounded, as the market struggled to overcome worries about tax rises in the Budget, but investors still received a healthy first-day profit.

Any member who successfully applied for pounds 1,500 worth of shares in the institutional and retail offer that accompanied the free-share handout, would have made a paper profit of pounds 342. Members enjoyed a 25p a share discount in the offer, and successful applicants were able to pick up shares at just 265p.

The price of the shares is expected to remain volatile as the market focuses on concerns that the Government may remove the tax advantages of tax-exempt groups such as pension funds and charities. That would have a knock on effect on the stock market value of shares.

Analysts have said the fair value of Norwich Union shares is between 280p and 340p but, as with the Halifax and Alliance & Leicester flotations, continuing upward pressure is expected to be put on the shares by institutions keen to increase their exposure to the stocks before Norwich Union enters the FTSE 100 index of leading companies.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Isis in Syria: Influential tribal leaders hold secret talks with Western powers and Gulf states over possibility of mobilising against militants

Tribal gathering

Influential clans in Syria have held secret talks with Western powers and Gulf states over the possibility of mobilising against Isis. But they are determined not to be pitted against each other
Gaza, a year on from Operation Protective Edge: A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians

Gaza, a year on from Operation Protective Edge

A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians
Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously

Illnesses, car crashes and suicides

Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously
Srebrenica 20 years after the genocide: Why the survivors need closure

Bosnia's genocide, 20 years on

No-one is admitting where the bodies are buried - literally and metaphorically
How Comic-Con can make or break a movie: From Batman vs Superman to Star Wars: Episode VII

Power of the geek Gods

Each year at Comic-Con in San Diego, Hollywood bosses nervously present blockbusters to the hallowed crowd. It can make or break a movie
What do strawberries and cream have to do with tennis?

Perfect match

What do strawberries and cream have to do with tennis?
10 best trays

Get carried away with 10 best trays

Serve with ceremony on a tray chic carrier
Wimbledon 2015: Team Murray firing on all cylinders for SW19 title assault

Team Murray firing on all cylinders for title assault

Coaches Amélie Mauresmo and Jonas Bjorkman aiming to make Scot Wimbledon champion again
Wimbledon 2015: Nick Bollettieri - Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!

Nick Bollettieri's Wimbledon Files

Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!
Ashes 2015: Angus Fraser's top 10 moments from previous series'

Angus Fraser's top 10 Ashes moments

He played in five series against Australia and covered more as a newspaper correspondent. From Waugh to Warne and Hick to Headley, here are his highlights
Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high