Royal Mail shares are expected to be 15 times over-subscribed, following reports that institutions and members of the public have requested £30bn worth of shares, with just £2bn worth being made available.
Brokers reported demand for the shares continued to be strong in the run-up to yesterday’s midnight deadline, although many claim investors were asking for way more in a bid to secure the number they want once 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 only 386 employees out of a total of 150,000 have opted out, despite a union poll which claimed 96% are against privatisation.
However, some private investors are already looking to sell their shares even though they will not know how many they have received until next week. One broker confirmed that many had started selling shares on the so-called “grey market”, which takes place before the shares are officially launched, because they were already making a profit on their purchase price.
IG Index chief market strategist David Jones said: “There are plenty of sellers,” said David Jones at . “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. 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.”
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@RoyalMailGroup sell-off oversubscribed 15 times at investors seek £30bn worth of shares http://t.co/0WRZ62H3BK #directmarketing #directmail