Shares soar ahead of full debut
More small shareholders are to get the chance to trade their shares in Royal Mail after another day of strong gains for the newly-privatised company.
While shares in the letter and parcel delivery firm have been traded conditionally since Friday, Royal Mail will make its full stock market debut tomorrow in a landmark day for the 500-year-old institution.
All 690,000 small investors who bought stakes for £750 will be able to cash in paper profits of about £329 each, based on tonight's closing price of 475p, when shares go unconditional.
Shares in the company closed up another 4% today, a gain of 44% on their initial valuation.
That values the company at £1.4 billion over the price tag applied by the Government on Thursday, which valued it at £3.3 billion.
Around 68 million shares in the company changed hands today, as demand for the newly-privatised company shows no sign of easing. More than 100 million shares were traded in the first hour of Friday.
Wednesday will see the result of a strike ballot by postal workers in the CWU over issues linked to privatisation.
Conditional dealing started on Friday for investors who applied for shares through brokers or big institutions.
But unconditional dealing in the company's shares begins tomorrow, meaning investors who bought direct from the government website can sell shares in Royal Mail.
And around 150,000 postal workers are sitting on stakes worth more than £3,000 after staff were given 10% of the company - although they cannot sell them for three years.
The steep rise in shares above the 330p price at which the Government valued them has stoked accusations that the company was sold too cheaply.
Dave Ward, deputy general secretary of the CWU, will address a mass meeting outside Royal Mail's Mount Pleasant site in central London shortly after the stock market opens.
He will say: "We may have lost the battle over privatisation, but we are here to fight the war for jobs, services and terms and conditions in Royal Mail and the wider postal industry.
"Privatisation makes the need for a legally-binding deal on jobs more important than ever. CWU is here for the long-term, regardless of who owns this company."
CWU members are expected to back industrial action, with any strike set to be held on or after October 23 - the run-up to the busy Christmas period.
Ballot papers have been sent to over 115,000 Royal Mail and Parcelforce staff in the first nationwide vote since 2009.
The ballot is over pay, job security and terms and conditions, issues the union said have been made more urgent following the sell off of the company.
The Royal Mail share sell-off was about seven times oversubscribed among small investors, while among big institutions such as pension funds and hedge funds, demand exceeded supply by 20 times. About a third of the shares on offer went to retail investors, while institutions got 67%.
Stockbroker Hargreaves Lansdown said it has been "very busy" again today, after demand on Friday crashed its website and left phone lines jammed.
A spokesman for the Bristol-based broker said it had been "controlling throughput" to its website - leaving some investors unable to trade online. But he said waiting times on its phone lines were down to less than a minute.
The Labour chair of the Commons Business Select Committee said the early evidence of the share price "vindicated" concerns raised when it quizzed Business Secretary Vince Cable last week.
Adrian Bailey said he would seek fresh hearings about the sell-off, including possible grillings of the banks which advised the Government on the firm's value, if the market price remained so high.
But he needs the agreement of the committee, which has a majority of coalition MPs.
"At the meeting last week it's fair to say that members of the committee had one view and the Secretary of State had another," he said.
"The share price movements have vindicated the concerns of the committee members.
"Let's see where the price settles."