Royal Mail ‘was valued at £5bn’

<p>Investment banks valued Royal Mail as highly as £5 billion this summer.</p>

The government has again come under fire for selling Royal Mail at a low price.

Investment banks valued the organisation at £5 billion this summer, but it floated on the stock market earlier in the month at a valuation of around £3.3 billion.

Despite shares having only been available for open trading for a few days, stocks in Royal Mail have already exceeded the 500p mark that would value the firm at £5 billion.

According to a report by the Financial Times, neither of the two investment banks to have valued Royal Mail at £5 billion were involved in the sale of the institution.

The Labour Party previously criticised the government for selling shares in Royal Mail for too low a price, but business secretary Vince Cable has defended the decision.

Shares in Royal Mail have continued to rise in value this morning (October 21st). At 08:33 BST today, stocks in the firm were trading 4.28 per cent higher than at the start of the session.

Find up to date information on the FTSE 100 and spread betting strategies at City Index

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.