Royal Mail shares expected to be 15 times over-subscribed

[TrueBlueTerrier]

http://www.telegraph.co.uk/news/uknews/ ... ribed.html" onclick="window.open(this.href);return false;

Royal Mail is expected to deliver the Government’s highest sale price, with the historic share offer set to close 15 times over-subscribed.

Institutional and retail investors have reportedly requested £30bn worth of shares, though the offer is expected to be just £2bn when the first phase of the privitisation is launched on Friday.

Sources insisted that the Government intends to stick to its range, despite temptations to raise its launch price. But the delivery business is expected to be priced at 330p-a-share, the top end of the 300p to 330p range, which would value Royal Mail at £3.3bn.

Brokers said demand for the shares continued to be strong in the run-up to Tuesday’s midnight deadline when the order books were due to close. But spreadbetters reported an increasing number of short-sellers too amid concerns that excitement around the privatisation was over-heating.

Brokers said the £30bn figure was vastly inflated by investors boosting their requests in the hope of eventually securing the shares they want once their requests have been scaled back.

Almost all of Royal Mail’s employees have accepted the staff offer of around £2000-worth of shares. The latest figures showed that just 386 employees out of 150,000 have decided to opt out, despite the on-going threat of strikes.

Meanwhile, a raft of private investors decided to cash-in on big profits they had already made in the grey market. The price offered by IG Index fell from highs of £4.06 on Monday to around £3.88 as private investors sought to capitalise on their gains.

“There are plenty of sellers,” said David Jones at IG Index. “Some are those who bought when the grey market opened so they are booking profits. Others have taken out short positions because they believe the trading has got a little bit too frothy.”

When IG Index opened its grey market a couple of weeks ago, it offered bets that shares in Royal Mail would open at £2.70. Intense retail demand has pushed the price over £4. Mr Jones said: “Investors who bought a pound a point at £2.70 are booking a real profit of £118 a point today - not bad for a stock that hasn’t even started trading yet.”

[wabbithunta]

Hmm. This news item states that: [I wonder who's correct?]

http://www.bbc.co.uk/news/business-24462388" onclick="window.open(this.href);return false;

Royal Mail shares 'seven times over-subscribed'


The Royal Mail share-offering for private investors was seven times over-subscribed, with 700,000 applications in total, according to the Business Secretary Vince Cable.

Speaking to a committee in parliament, he said he was "confident" the shares were "priced in the right place".

Shares will begin full trading on Friday, priced between 300p and 330p.

Mr Cable's comments come after criticism from Labour that the shares were being sold too cheaply.

Strong demand
The deadline for the general public to buy shares was on Tuesday.

Shares were initially priced between 260p and 330p, but strong demand led the government to revise the figures up on Friday last week.

Private investors were offered 30% of the shares, with the rest being sold to institutional investors such as pension funds and insurance companies.

The offering for institutional investors was also heavily over-subscribed, he said.

Under the terms of the share sale, a 10% stake in the business has been reserved for Royal Mail employees.

The sale is expected to value the firm at £3.3bn, at the top of the target range. It will be one of the largest in Britain since the privatisation of the railways by John Major's Conservative government in the 1990s.

The floatation compares to BT shares sold by the government in 1984, which were 3.2 times oversubscribed with 96% of its employees becoming stakeholders.

Royal Mail said the fundraising would provide it with the money needed to modernise and compete in a competitive parcels market.

Mr Cable was asked by MPs how he would protect the company from retail investors selling quickly for short-term profit.

He said: "Obviously we can't account for how the retail investors use the shares when they have acquired them."

He said the government was "committed to protecting that particular group", adding smaller private investors were probably not looking to "make a killing".

He added that he was "absolutely confident" that shares would be placed with long-term investors, as the government was not just looking for the highest bid, which could encourage short-term investors such as hedge funds.

Shadow business secretary Chuka Umunna criticised Mr Cable on Monday for "short changing" taxpayers.

But Mr Cable said Labour's criticism was "irresponsible" as it could imply an "easy bargain" could be had.

Mr Umunna also said the £750 minimum application was too high.

Danny Cox, head of financial planning at Hargreaves Lansdown, said recent political wrangling over the share price would not make much difference who decides to sell or not.

"People will decide to buy or hold the shares based on their own views about how the price would change in the first few days," he said.

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This part is at the end of the article, so if you do feel like responding then do so via the BBC website.

Do you work for Royal Mail? Have you bought shares? Is this the first time you've bought shares? Share your comments with us using the form below.

[the deliverer]

This article although 3 years old tells a few home truths. I wonder how long the public will hold onto their share of the shares? Not long judging by this article. Anyone got any reference to up to date information along these lines?

Personal share ownership falls to just 10% of UK shares

WHO OWNS UK QUOTED SHARES 2008
Rest of world 42%
Insurance companies 13%
Pension funds 13%
Individuals 10%
Unit trusts 2%
Investment trusts 2%
Others financial institutions 10%
Charities 1%
Private non-financial companies 3%
Public sector 1%
Banks 4%
Source: ONS

Individuals in the UK own just 10% of the shares traded on the London Stock Exchange, down from 13% in 2006 and far lower than the 54% they owned in 1963.

Foreign investors, of all types, are the biggest group and now own 42% of shares on the London stock market.

The latest figures, as of the end of 2008, were compiled by the Office for National Statistics (ONS).

The data reveals the huge changes in the pattern of share ownership in the UK in past 45 years.

Despite the extension of share ownership being one of the great mantras of the Conservative governments of the 1980s and 1990s, their policy of privatising nationalised companies has had little long term impact on the overall position of private shareholders.

"The proportion of shares held by individuals has been on a downward trend since 1963," the ONS said.

"Although the trend was flat at around 20% between 1989 and 1994, by 2004 holdings had decreased to 14%.
"The proportion of holdings has continued to fall and in 2008 stood at 10%," the ONS added.

Foreigners
Back in 1963 foreign investors owned just 7% of UK shares.

After dipping in the 1970s, their share of the UK market rose rapidly in the 1980s and 90s, and has continued rapidly since then.


Foreign investors became the single biggest category of investor in 1997, by which point their ownership had risen to 28% of share trade on the London stock market.

"The large increase since 1994 partly reflects the growth in international mergers and acquisitions, as well as refinements to the classification of holdings, including the incorporation of securities dealers' data," the ONS explained.

Most of the business of firms on the London stock market is conducted abroad, even if their origin lies in the UK.

BBC business correspondent Nils Blythe said there were few hard facts about this aspect of share ownership.

"Many companies do not publish a geographical breakdown of where they do business," he said.

"But a sensible round number, estimated by an analyst at Morgan Stanley, is that about a third of the turnover of UK quoted companies is generated in the UK and two thirds overseas," he added.

Nationalisation
The government's ownership of UK shares shot up, from the 0.1% as of the end of 2006 to 1% in 2008, because of the nationalisation of the RBS banking group.

Meanwhile bank ownership of UK shares in 2008 was the highest since the ONS records started in 1963.

The proportion of shares on the London stock market owned by insurance firms and pension companies has been in decline since 1993.
Their combined stake in UK shares was 52% then, but by the end of 2008 had dropped to just 26%.

"With the increasing number of alternative investment opportunities throughout the 1990s, fund managers looked to broaden their portfolios to seek higher returns and to spread risk," said the ONS.

"ONS inquiries to pension funds show a trend towards bond investment starting in 1999."

[Pokemon Postmon]

I heard another pundit on one news channel tonight (forget which, sorry) saying that we'll just sell our shares for a quick buck too. Now, dunno about anyone else here, but I'm getting sick of having to explain to everyone who thinks I'm about to get a windfall that I can't sell them for at least three bloody years!!

[wabbithunta]

I heard another pundit on one news channel tonight (forget which, sorry) saying that we'll just sell our shares for a quick buck too. Now, dunno about anyone else here, but I'm getting sick of having to explain to everyone who thinks I'm about to get a windfall that I can't sell them for at least three bloody years!!

So much for them being a pundit and ITK then. Just shows you really that they know sod all about it and if they can't even be bothered to research something they are meant to be ITK about then why use them on a news channel let alone on any media outlet.