Money: Fear of finance

Railtrack, the rump of British Rail once the trains had been detatched for selling separately, finally set off down the line towards privatisation this week. The prospectus will be published on April 15, the shares will be priced early in May and the offer for sale will close in the middle of May.

Private investors who register for a prospectus and apply through one of 110 different share shops, operated by banks, building societies, stockbrokers and a motley crew of other financial intermediaries, will be eligible for a likely discount and will get preference if the offer is oversubscribed. Including bank and building society branches there will be more than 10,000 high street outlets offering shares to investors.

The shares will be paid for in two instalments, and the second will not be due until the 1997-98 tax year. The minimum investment has yet to be decided and allocations could be scaled down, but interested investors willing to put up a minimum of around pounds 250 in the hope of making perhaps pounds 50 profit should choose a share shop and register in the next couple of weeks.

Unless you are determined to buy and hold shares as an investment, you should make sure the share shop you select will offer you the opportunity to sell shares over the phone as soon as dealings start, without waiting for actual share certificates confirming ownership to arrive, which on past precedent will be several days after trading begins. Dealing charges if and when you sell are also likely to vary.

But investors should also remember that British Energy, the nuclear powered business of the old Electricity Generating Board, has been set trundling on its way to market hard on Railtrack's heels. Registration will begin in late May and the company is likely to be sold in July, just six weeks after Railtrack.

There are very good reasons why both these old warhorses have been held back to the very end of the privatisation queue. Until recently no sane investor would have touched them. The railways were seen as a run-down social service rather than a proftable transport system. But investors can be fairly sure that Railtrack at least has been fattened up for sale. It is an asset-rich business, with a stock of stations with development potential and a monopoly of the tracks over which the train service companies operate.

It has been pretty well insulated from competition and is likely to be a nice steady earner, at least until and unless a Labour government instals a watchdog committed to transferring benefits from shareholders to consumers.