Royal Mail shares deliver new high

Shares in the letter and parcel delivery firm hit a high of 475.3p in early trading – valuing the company at almost £4.8bn, compared with its £3.3bn initial valuation on Friday.

They settled back to 462p, a gain of about 1.5 per cent on Friday’s 455p close, as demand for the newly-privatised company shows no sign of easing.

At that level more than 700,000 small investors who bought stakes for an initial £750 will be sitting on a paper profit of about £300, assuming they did not cash them in on Friday. And around 150,000 postal workers hold stakes worth more than £3,080 – although they cannot sell them for three years.

Shares in the company have now risen 40 per cent above the 330p price the Government valued them at – stoking accusations the company was sold too cheaply. The flotation was described by Labour leader Ed Miliband as a “fire sale of a great institution at a knock-down price”.

Full dealing in the company’s shares will begin today, when all investors can buy and sell shares in Royal Mail. Conditional dealing started on Friday for investors who applied for shares through brokers. That will be followed tomorrow by the result of a strike ballot by postal workers in the Communication Workers Union over issues linked to privatisation.

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.

Demand remained rampant yesterday, with about 16 million shares changing hands, following Friday’s frenzy when more than 100 million shares were traded in the first hour. Stockbroker Hargreaves Lansdown said it has been “very busy” again yesterday, after demand on Friday crashed its website and left phone lines jammed.

A spokesman for the Bristol-based broker said it is “controlling throughput” to its website – leaving some investors unable to trade online.