27th September 2013
1) Royal Mail shares are on sale now until October 8. The shares will be priced at 260p to 330p per share and retail investors can buy into the IPO for as little as £750. With the stock price at this level, this implies a market capitalisation of between £2.6bn and £3.3bn as Mindful Money reported this week.
2) Political and investment news. Ed Miliband surprised with the announcement that he plans to cap utility prices for 20 months if he wins power. Utilities suffered with Centrica and SSE falling about 3%. Peter Atherton, a utilities analyst at Liberum Capital said the market will now be pricing these shares according to the opinion polls as the Telegraph reported. Mindful Money suggested it could damage a traditional defensive but reliable dividend paying sector.
3) The market is digesting the impact of Angela Merkel’s third and most emphatic election victory. The consensus is that it will – mostly – be business as usual. The Eurozone austerity message may be dialed down a little because her most likely coalition partner is the centre left SPD. They had talked of a Marshal plan for southern Europe. But Merkel’s view is likely to dominate as she nearly won an overall majority. Tricky negotiations continue.
4) Bank of England Governor Mark Carney tells a meeting of Yorkshire businessmen that he says he sees no need for further cash injections/QE/bond buying to boost the UK economy as the the Independent reports. Sterling has strengthened. Monday’s stock market reaction may be telling.
5) Back to life, back to reality for banks? RBS sells 314 bank branches for £600m to the Corsair Consortium – which includes the Church of England. The Church Commissioners have set out a blueprint for an ethical bank, and its fellow investors have agreed. It will form a stand-alone public company by 2015 as the BBC reports. RBS shares rose on the news. More bank competition on the way then which must be a good thing.