View the article online at http://citywire.co.uk/money/article/a876718
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'.
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.'
News sponsored by:
Making the most out of Europe's potential means seeing things differently. Learn more about how BlackRock's focused approach to investing in Europe helps investors unlock the continent's vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the shares
More from us
Tools from Citywire Money
From the Forums+ Start a new discussion
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.