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Osborne delays Lloyds share sale after market slump

Chancellor George Osborne halts sale of Lloyds shares to public, saying he will sell only when markets 'have calmed down'.

 
Osborne delays Lloyds share sale after market slump

Chancellor George Osborne has delayed the planned sale of shares in Lloyds (LLOY) to the public, saying 'we'll only sell when turbulent markets have calmed down'.

The government had intended to sell £2 billion of shares in Lloyds this spring, as the Treasury offloads its remaining stake in the bank.

But Osborne said he had delayed the sale due to the slump in the markets. 'We'll build a share owning democracy,' he said on Twitter. 'So British people can buy Lloyds shares but we'll only sell when turbulent markets have calmed down.'

With markets having slumped at the turn of the year as fears over China's slowing growth and the tumbling oil price gripped investors, shares in Lloyds, at 63.4p, are well below the 74p price the government paid when bailing out the bank at the height of the financial crisis.

Plans to offer investors a 5% discount on the shares, and a bonus share for every 10 bought, would have left the Treasury even further in the red.

'This will be a big disappointment for the hundreds of thousands of investors who had queued up for a chunk of Lloyds, but taking a big loss on selling shares when markets are low was always going to be a bridge too far for the chancellor,' said Laith Khalaf, senior analyst at Hargreaves Lansdown.

'The government is looking to obtain a good price for the remaining 10% of Lloyds it owns and timing to get the best value around issues such as the Budget, financial and tax year end and Lloyds' own financial calendar was always going to be tricky.'

Russ Mould, investment director at AJ Bell, added: 'Osborne will clearly be looking for a better deal for the government, to maximise returns as best he can, and he won't want any issue that was aiming for substantial involvement from private investors to be a flop.

'That would damage already fragile sentiment and make it harder for any future privatisations to do well.'

6 comments so far. Why not have your say?

colin overton

Jan 28, 2016 at 13:30

Dim George might reflect that one reason that Lloyds share price is down is that he was/is going to sell his holding at a discount?

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mikest

Jan 28, 2016 at 14:21

Chancellor to delay public sell-off due to 'market turbulence'. Question: Does this mean when the shares are back above the 81p average achieved for the shares already sold?

As the Q3 results were so disappointing, can we assume that all the 'bad news' will have been factored in before the 25 Feb results are published? If so, would it make sense for us to 'fill our boots' with LLOY shares in anticipation?

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Mike R

Jan 28, 2016 at 15:24

a combination of Market Computer Players ,UKFI, the PPI con trick extending for years and GO himself and The FCA regulators. George let the players and all run away with the profits instead of selling this retail a long time ago . Giving to any institution to sell and managing it from UKFI is a certain kiss of death. AND the losers the Taxpayer who bailed it all out and are now giving over 14 billion to overseas PPI ambulance Chasers . What a way to run any Lottery.

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Al

Jan 28, 2016 at 15:36

He just wants to be able to say at the dispatch box that the gov got back what they shelled out. Politics.

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Godfrey Billy

Jan 28, 2016 at 17:13

George selling Lloyds shares at a loss will definitely hunt him badly after all he has spent all the years as chancellor to criticise Brown on selling gold at a low price.

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Mike R

Jan 28, 2016 at 17:41

all he had to do was approve the Dividend payment earlier and put a time limit on PPI-- too much high priced help around as well as the usual play from the City.

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