Government’s NatWest share sale stuck in limbo as election derails plans

Following the announcement of a General Election to take place on July 4th, Lindsay James, investment strategist at Quilter Investors, has warned of challenges for Government’s sales of its shares in NatWest.

James said: “The summer had been earmarked as the penultimate chapter in terms of reducing the government’s ownership of NatWest, with the launch of a retail offer harking back to the ‘Tell Sid’ campaign of the 1980s.

“The government’s stake once sat as high as 84% when it propped up the company back in 2008, but it was expected to reduce this from where it currently sits, at just under 30%, down to 10%.

“NatWest’s share price has been doing reasonably well in the last year, and the Treasury was likely hoping to be opportunistic in monetising this as the sale would have brought in around £6 billion.

“Shares have performed well of late, and while banking stocks are not the most exciting, it had the potential to generate interest amongst the investing public.

“This retail offer, along with other initiatives such as the UK ISA, was part of the government’s package of ideas to help reinvigorate the UK stock market and a public investing culture.

“The news that the general election will derail the timing of this and likely become the responsibility of the next government leaves those plans somewhat in a state of limbo.

“The government proposed a similar scheme with its ownership of Lloyds back in 2015, but that never saw the light of day.

“With political uncertainty now in place, there is every possibility the same happens with these shares in NatWest.”