Royal Mail share sale sees its value drop

Royal Mail is the biggest loser in FTSE trading today (June 11th) after a tranche of publicly-owned shares were sold off to private investors on Wednesday.

The transaction raised £750 million for the country's coffers and means that the government has roughly a 15 per cent stake left in the company.

As a result of the move, Royal Mail has seen its share price fall by over four per cent in morning trading, reaching 495.10 points as of 11:00 BST.

Business Secretary Sajid Javid said it was a good move on behalf of taxpayers, adding: "Royal Mail has demonstrated that it can thrive in the private sector. It now has the ability to access the funds it needs to ensure that it has a sustainable future and can adapt to the changes in the postal market."

He added the government does not see any "policy reason" for holding on to the rest of its stake, which indicates that the company will be 100 per cent privately owned in the not-too-distant future.

The initial public offering for Royal Mail back in 2013 was hugely criticised as not representing value for money – indeed, the shares have risen in price by over 50 per cent since the sell-off took place.

Elsewhere, the Royal Bank of Scotland has made gains in this morning's trading after George Osborne confirmed plans to return the bank to private hands sooner than initially thought.

Commentators have welcomed the move, noting that banks are typically more profitable when they are freed from public ownership and can follow their own strategy.

The country currently has a £32 billion stake in the company, and the process of getting rid of this will begin in the next few months. It means the first tranche will actually be sold at a loss, something Mr Osborne previously said would not happen.

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