Guide to Spread Betting on Royal Mail Shares with Analysis, Broker Ratings, Live RMG Charts & Prices
Clean Financial - The Financial Spread Betting Website
Royal Mail Spread Betting

Royal Mail Spread Betting

Where Can I Spread Bet on Royal Mail?

At the moment, you are able to take a position on Royal Mail through an account with the following providers:

IG Index
Broker Ratings - Sponsored by IG

Royal Mail Broker Ratings

A look at the latest Royal Mail broker ratings:

DateBroker Rating Broker Last Price Target Price Potential Upside / Downside
18-Dec-13Brokers Tips - SellSellUBS581.5450-22.61%
18-Dec-13Brokers Tips - BuyBuyEspirito Santo Execution581.56359.20%
11-Dec-13Brokers Tips - ReduceReduceNomura596.5490-17.85%

For the latest UK broker ratings see Daily Trading Tips.

This is Not Investment Advice

Where Can I Find Live Spread Betting Prices and Charts for Royal Mail?

The live CFDs chart below offers you a handy overview of the Royal Mail share price.

Note, the Plus500 charts normally track the underlying futures contract (not the spot price).

If you want to access live financial spread betting prices and charts for Royal Mail, you will probably need a spread betting account. Note, opening such an account is normally dependent on credit, suitability and status checks.

Should your new account be accepted, you can log in and see the charts and the current prices. These are normally free. The catch is that you'll probably receive an occasional sales letter and/or email from the spread betting firm.

Of course, if you decide to trade then, before you start, you should be aware that financial spread betting involves a high level of risk and can result in you losing more than your initial investment.

See below for more on advanced Royal Mail charts.

Royal Mail Analysis & News

Date Trading Update
03-Oct-17 [11:49am]

Royal Mail Share Price Update:

Falling Share Price The stock is currently trading below the 20 day moving average of 380.7p and below the 50 day moving average of 389.3p.
  • Current Price(i): 379.7p
  • Closing Price: 378.4p
  • Rising Share Price 1 Day Change: Up 1.50%
  • Falling Share Price 5 Day Change: Down -1.51%

Long-Term RMG.L Data

  • 52 Week High 52 Week High: 501.0p
  • 52 Week Low 52 Week Low: 368.3p
  • EPS(i): £0.27
  • PE Ratio(i): 13.87
  • Volume / Average Volume(i): 0.856m / 3.766m
  • Market Cap(i): £3,797m
  • Shares Outstanding(i): 1,000m
Price data from Google Finance. Also see Live RMG.L Share Price & Charts and About Royal Mail for more information.

Update by Jenna Cutly, Editor, CleanFinancial
19-Nov-14 [8:59am]

Staffing Costs Continue to Weigh on Royal Mail

The postal firm continues to struggle with rising staff costs, with around 60% of its costs attributable to staff, compared with a 45% sector average.

The firm is looking at asset disposal to make itself more competitive but the UK government's 30% stake may well ensure that significant job cuts are unlikely in the short-term.

Update by Alastair McCaig, Market Analyst, IG Index
19-Nov-14 [7:46am]

Royal Mail Results Show that Santa Remains Key

The spectre of Amazon looms large in Royal Mail's numbers today, casting a shadow over the numbers.

A 6% decline in pre-tax profits to ?218 million is one thing, but the warning about reduced parcels growth will send a winter chill down the spine of shareholders.

The impression given from the statement is that Amazon is likely to become a permanent fixture in Royal Mail's reporting, much like the weather (whether warm or cold) is for retailers.

Increases in operating profit margins will offer some comfort, while the boost in letter volumes will help too, even if this is partly influenced by election campaign volumes that won't recur every year.

However, the statement finishes on a cautious note, admitting that Christmas will be the key determinant in overall performance.

Christmas comes but once a year, so investors need to ask themselves if they really want to back a company that only really delivers good performance thanks to a six-week busy period?

Update by Chris Beauchamp, Market Analyst, IG Index
24-Jan-14 [10:45am] Royal Mail Hit Targets but Needs to Improve

Considering the hype surrounding Royal Mail shares in the last few months, taking the stock over 70% higher than its much debated IPO price, today's results provided somewhat of an anti-climax, with the stock opening slightly higher only to drift back near breakeven by mid-morning.

The focus was always going to be on the Parcel business, with letters clearly not a model for future growth in today's technological age, as well as a sneak preview from UK Mail who reported a 15% rise in parcel volumes for Q3.

The response from Royal Mail was mixed, which perhaps explains today's lack of cohesion in the price.

On the one hand, revenues were up 8%, but that was largely due to an increase in pricing and at the expense of overall volumes which remained flat for the period.

A 3% drop in UK letter volume provides further headwind, and is not a trend that would logically see any reverse in future updates.

Overall they sit relatively flat, still an astonishing performance from its debut, but likely to have to up their game a bit just to tread water at these levels.

Update by Toby Morris, Senior Sales Trader, CMC Markets
23-Jan-14 [9:06am]

Investors Focus on Royal Mail Group Profits

Given the recent surge of the RMG share price, the company will now have to justify the current high valuation. There are also high expectations that the company enjoyed a bumper Christmas period.

Sector peer UK Mail last week posted a 6% rise in quarterly revenue on the back of parcel deliveries in the pre-Christmas trading period. UK Mail also reported a 15% rise in Q3 volumes.

A similarly robust set of numbers will be expected from Royal Mail this Friday, particularly in the light of last Friday's blowout retail sales numbers for December, as well as the significant increase in online sales reported by various retailers in their recent trading updates.

However, following last week's disappointing earnings warning by US bellwether UPS, this should not be taken as a given.

Royal Mail Profit Expectations

Last year the firm reported profits of ?324m and this week's 9 month trading update is expected to show that the company is on track to meet annual expectations of pre-tax profits of ?500m. Revenues should be slightly higher at ?9.4bn.

Update by Michael Hewson, Senior Market Analyst, CMC Markets
12-Nov-13 [11:26am] Royal Mail Continues its Recent Falls

The Royal Mail market closed yesterday at 557.3p and today they have already hit a low of 539.8p.

Whilst there has been a 10 point bounce back to trade at the current spread of 550.3p-552.7p, the market is still well off its 5 Nov high of 590.4p.

If you are trading this market, be warned, it's yet to settle and there is little new fundamental and so it's looking quite volatile.

Update by Jenna Cutly, Editor, CleanFinancial
04-Nov-13 [12:13pm]

Royal Mail Shares Post Yet Another High

Financial Spreads are now quoting 584.768p to 588.234p for their rolling daily market.

The Royal Mail Mar 2014 futures market is quoted at 585.9p - 589.8p

The futures market closes on 18 March 2014 but if you take a position you can opt to close your trade earlier if you want.

Futures markets normally have a slightly wider spread than the daily markets but they don't have overnight financing fees. See How to spread bet on Royal Mail shares for more details.

Update by Gordon Childs, Editor, CleanFinancial
16-Oct-13 [2:15pm] In the new post on our blog, Michael Hewson of CMC Markets discusses why a lot of the talk about the Royal Mail IPO being under priced may just be hot air.

The Difficulties of Valuing Royal Mail

Update by Gordon Childs, Editor, CleanFinancial
15-Oct-13 [3:31pm]

Live Royal Mail Charts and Prices

We have now added live Royal Mail CFD charts and prices to this guide.

The charts and prices are based on the underlying Royal Mail share price and are therefore useful for any investors looking to speculate on the UK firm, whether they are financial spread betting, trading the physical shares or CFD trading.

See below for the live Royal Mail charts and prices.

Update by Gordon Childs, Editor, CleanFinancial
15-Oct-13 [1:37pm] The broader market has welcomed trading in the newly listed Royal Mail shares, pushing prices even higher from the original 330p sale.

Following a spike on the open driven by heavy buy orders, the stock stabilised at 490p and has been drifting ever since.

It's great to see the demand the market has for these shares confirmed, perhaps raising some awkward questions for the incumbent administration.

Retail investors who participated in the sale are sat on a 45% return in a very short period, potentially whetting the appetite of investors who haven't dealt since the financial crisis.

Investors Turn to Spread Betting to Short Royal Mail

We've seen strong demand from our spread betting account holders looking to synthetically close their positions by going short of the shares with us as they haven't yet received their login details from the official site yet.

With the short-term return so strong, it's understandable that smaller investors are looking to take some money off the table.

The current borrowing charge associated with shorting is ~3%.

Update by David White, Trader, Spreadex
15-Oct-13 [9:08am] Royal Mail Price Investigation

Vince Cable, the UK Secretary of State for Business, Innovation and Skills, is under pressure as the Royal Mail share price soars.

MPs are set to escalate their investigation into the price at which the Government sold the national postal network (full story in The Times).

Update by Gordon Childs, Editor, CleanFinancial
15-Oct-13 [8:39am]

The Start of Unconditional Trading

Royal Mail started unconditional trading today, this means that the IPO can no longer be undone and positions cannot be unwound.

Most spread betting and CFD markets track the underlying market. Today, the market opened at 478p.

So far, there has been a firm 10p move higher and the market is trading up at 487.140p - 488.860p.

Update by Gordon Childs, Editor, CleanFinancial
14-Oct-13 [9:40am] Trading Update

Royal Mail closed on Friday at around 452p, this morning the FinancialSpreads market hit 474p by 8.30am.

Whilst the market is now trading a little lower, it is still 10p up on the open.

FinancialSpreads are running both spread betting and CFD markets, these are currently priced at: 462.921p - 464.580p

Note that not all firms offer as many decimal places on equity markets and it may seem confusing at first. However, the principle of the extra decimal places is to give extra price accuracy and slightly tighter spreads to investors.

In this case, it would make precious little difference to my trading but it should lower the cost of trading for larger investors and high frequency traders.

Update by Gordon Childs, Editor, CleanFinancial
14-Oct-13 [9:25am] There is a new spread betting video on the blog which discusses a range of markets including Royal Mail.

Royal Mail Surges from IPO Price Despite Lingering US Political Deadlock

Update by Gordon Childs, Editor, CleanFinancial
11-Oct-13 [4:55pm] First Day of Trading

It's been a volatile first day of trading for Royal Mail shares, as you can see from the IG chart below:

Royal Mail Shares - First Day of Trading

Update by Gordon Childs, Editor, CleanFinancial
11-Oct-13 [3:32pm] Royal Mail Shares Calm Down (a bit)

Enthusiasm surrounding the Royal Mail launch has been attracting a great deal of interest from all sides of the investment community.

The shares have settled down somewhat but there does appear to be significant interest to buy the shares with buying interest outweighing selling interest by about four to one, 5% either side of the current share price.

This 35% jump in the share price has certainly added fuel to the charge that the shares were under-priced by the government, however criticism would have been equally as harsh if the shares had been over priced and the issue had gone the way of the Facebook IPO just over a year ago, where the share price halved over the following months.

The fact that the UK's smaller investors felt confident enough to participate in an IPO has to be good for stock market confidence in the longer term.

It could augur well for future offerings when the government looks to sell-off TSB and the rest of the Lloyds Group.

Update by Michael Hewson, Senior Market Analyst, CMC Markets
11-Oct-13 [10:46am] Rising UK Share Royal Mail +38%

Shares in Royal Mail rose more than 38% to 456p at the start of conditional dealings on the London Stock Exchange this morning. The stock opened at 450p a share, over ?1 higher than the initial 330p price given during the IPO.

The floatation itself means the government's stake in the Royal Mail is reduced down to 38% with the possibility of a further reduction to 30% through an over-allocation option. The price rise is likely to fuel debate over whether the sale of Royal Mail has been undervalued whilst business Secretary Vince Cable has insisted that the taxpayer has not been short-changed by the privatisation.

Update by Lee Mumford, Trader, Spreadex
11-Oct-13 [9:55am] The Real Action Begins

The real action today has been centred on one of the most widely anticipated share placements in recent memory.

Given that Royal Mail shares opened sharply higher by an astonishing 36% this morning, one can only say that investors have clearly given their stamp of approval to the offering.

100m shares were traded within the first hour of trading, i.e. 10% of the issue.

The highest price of 456p reached in the first few minutes of trading indicates that the market capitalisation of the company is approximately a ?1bn more than the government's initial valuation.

As it stands, this would effectively make the Royal Mail eligible for a FTSE 100 listing.

Whether this pricing can be sustained remains to be seen, and one could expect to see more clarity when the shares are listed officially next Tuesday.

Update by Brenda Kelly, Senior Market Strategist, IG Index
11-Oct-13 [8:46am]

Trading Royal Mail Shares

Whilst the Royal Mail shares don't enter unconditional trading until Tuesday, spread betting firms are usually a little more fleet of foot and we can already see some open markets.

For example, IG have closed their grey market, which was priced on the 'valuation' of the company.

They are now running a normal equity market where you spread bet on the price of Royal Mail shares. The spread is currently 442.38p - 443.51p but it's looking quite volatile.

If you are thinking of trading, please see the above risk warning. For worked examples, see how to spread bet on shares.

Other firms are also offering an RM market e.g. ETX Capital and Accendo.

Update by Jenna Cutly, Editor, CleanFinancial
11-Oct-13 [8:30am] Royal Mail started conditionally trading this morning and opened up 36% on the IPO.

The stock was hugely oversubscribed. It looks like anyone who asked for ?750 to ?9,999 worth of shares received ?750 worth of stock. Anyone who asked for ?10,000 or more, received nothing.

With demand so high for this stock, expect a volatile day.

Update by Alex Conroy, Trader, Spreadex
11-Oct-13 [8:01am]

Royal Mail Enters 'Conditional Trading'

So the grey markets are closing / have closed and we are now entering 'conditional trading'.

What is Conditional Trading?

Though unlikely, this means that the IPO can still be stopped and, if so, positions will be unwound.

The share price started conditional trading at 330p. So, with 1bn ordinary shares, that values Royal Mail at ?3.3bn.

Unconditional Trading

According to the Royal Mail pricing statement it is 'expected...that unconditional dealings in ordinary shares will commence at 8am on [Tuesday] 15 Oct 2013'.

This means investors should be able to access the market through their normal share dealing accounts on Tuesday.

If you want to trade the market before unconditional trading starts, we will post an update shortly.

Update by Gordon Childs, Editor, CleanFinancial
11-Oct-13 [7:45am] Royal Mail Shares Are Now Being Traded

For a look at the privatisation and how the grey markets predicted a strong start for the postal group, see 'The Privatisation of Royal Mail'.

Update by Jenna Cutly, Editor, CleanFinancial

Readers please note:

About Royal Mail

The Royal Mail Group ticker code is RMG, although on some sites you will also see RMG.L, where the .L stands for London Stock Exchange.

The main homepage for investors is

Here you will find the Annual Reports and Accounts, ‘Shareholder communications’, a chart and share price (15 minute delay).

For the official London Stock Exchange page see Royal Mail Group LSE page.

Royal Mail Social Media

If you are Tweeting about Royal Mail, or searching for RM Tweets, use the cashtags, $RMG or $RMG.L.

At the moment, the former tags seems more popular.

Professional Level Charting Packages for Royal Mail

Though the specific charting packages normally vary from firm to firm, in order to aid your technical analysis, the charts often have user friendly tools, including:
  • A range of time intervals - 1 minute, 1 hour, 1 day and so on
  • A variety of views - candlestick and OHLC charts
  • Drawing options - trendlines, Fibonacci arcs, fans and time zones

Charts on Financial Spreads, Capital Spreads and Inter Trader also come with advanced features such as:
  • Tailored Indicators and Back Testing
  • Helpful overlays - Moving Averages, Ichimoku Clouds, Wilder's Smoothing and so on
  • More than 30 indicators - Momentum Percentage, Williams %R, Accumulation Distribution and so on
  • Automatic email alerts for when a market reaches a given level

Sample shares chart

Royal Mail Trading Guide - Example Chart

The following financial spread betting companies provide their users with real time trading prices/charts:

Where Can I Trade Royal Mail CFDs?

You can currently trade Royal Mail contracts for differences (CFDs) with: This market may be available with other firms. Note that we also have a live Royal Mail CFD chart.

Where Can I Buy/Sell the Royal Mail Shares?

If you don’t want to speculate on Royal Mail using spread betting or CFDs then you could use a traditional stock broker such as Hargreaves Lansdown or TD Direct Investing.

Advert: Royal Mail Spread Betting, sponsored by
You can spread bet on Royal Mail with Financial Spreads.

Where Can I Spread Bet on Royal Mail for Free?

By its very nature, speculating always involves an element of risk. Nevertheless, if you would like to open a free Test Account, where you can try spread trading, see below for further details.

When deciding which investment option might work for you, don't forget that, in the UK, financial spread betting is currently free of capital gains tax, income tax and stamp duty*.

If you are trying to find a low cost spread trading website then you should note that you are able to trade Royal Mail without paying any stock-broker fees through providers like:

Free Demo Account

If you would like to open a completely free Demo Account that allows users to try out spread betting, and trading markets like Royal Mail, then you could consider: The spread betting companies listed above currently provide a risk free Test Account that investors can use to analyse charts, gain experience with a variety of trading orders and try out new strategies.

How to Spread Bet on Royal Mail

How to Spread Bet on Royal Mail?

Should you want to invest in Royal Mail then one option is spread betting on the Royal Mail share price.

Looking at FinancialSpreads, we can see that they are currently offering the Royal Mail Rolling Daily market at 436.454p - 437.797p. This means you can put a spread bet on the Royal Mail share price:

  Royal Mail Spread Trading Example Going above 437.797p, or
  Royal Mail Trading Example Going below 436.454p

Whilst spread betting on UK shares you trade in £x per penny. Therefore, should you decide to invest £5 per penny and the Royal Mail share price moves 24p then that would make a difference to your P&L of £120. £5 per penny x 24p = £120.

Rolling Daily Equities Markets

Be aware that this is a Rolling Daily Market and so there is no preset settlement date for this market. You do not have to close your trade, should it still be open at the end of the trading day, it will simply roll over to the next trading day.

If your bet does roll over and you are speculating on the market to:

  Royal Mail Trading Example Increase - then you will often be charged a small financing fee, or
  Royal Mail Trading Example Decrease - then you'll usually receive a small credit to your account

For a fully worked example see Rolling Daily Spread Betting.

Royal Mail Rolling Daily - Equities Trading Example

Now, if we take the above spread of 436.454p - 437.797p and assume:
  • You've completed your research, and
  • Your research leads you to feel that the Royal Mail shares will move higher than 437.797p
Then you may buy at 437.797p and invest, let’s say, £5 per penny.

If so, you make a profit of £5 for every penny that the Royal Mail shares rise above 437.797p. Of course, such a bet also means that you will make a loss of £5 for every penny that the Royal Mail market moves below 437.797p.

Put another way, should you ‘Buy’ a spread bet then your profits (or losses) are worked out by taking the difference between the final price of the market and the price you bought the spread at. You then multiply that price difference by your stake.

As a result, if after a few hours the share price started to increase then you might think about closing your position in order to secure your profit.

If that happened then the spread, determined by the spread betting company, might change to 455.966p - 457.309p. You would close your trade by selling at 455.966p. So, with the same £5 stake your profit would be calculated as:

P&L = (Closing Level - Opening Level) x stake
P&L = (455.966p - 437.797p) x £5 per penny stake
P&L = 18.169p x £5 per penny stake
P&L = £90.84 profit

Speculating on shares, whether by spread betting or otherwise, is not simple. In the above example, you had bet that the share price would go up. Of course, it might fall.

If the Royal Mail shares fell then you could choose to close your spread bet to limit your losses.

If the market fell to 421.380p - 422.723p then this means you would sell back your position at 421.380p. So your loss would be calculated as:

P&L = (Closing Level - Opening Level) x stake
P&L = (421.380p - 437.797p) x £5 per penny stake
P&L = -16.417p x £5 per penny stake
P&L = -£82.09 loss

Note: Royal Mail Rolling Daily price as of 11-Oct-13.

Advert: Royal Mail Spread Betting, sponsored by
You can spread bet on Royal Mail with Financial Spreads.

The Privatisation of Royal Mail

Below we take a look at the 4 months before Royal Mail was listed on the London stock exchange. We keep a particularly close eye on the grey markets that a number of firms were running prior to the listing.

Date Trading Update
10-Oct-13 [7:53pm] How is the Delivery Firm Performing?

For a look at how the share price has performed since listing on the stock market, see Royal Mail trading news and analysis.

Update by Jenna Cutly, Editor, CleanFinancial
10-Oct-13 [6:53pm]

IG Royal Mail Grey Market Closed

The IG Royal Mail grey market closed today, ahead of tomorrow's start of trading.

At the UK close the grey market was at 396-416.

This suggests a mid-price of 406p per share for Royal Mail.

Although according to David Jones of IG "Of course, this is just the grey market based on our client activity in recent weeks, there's no guarantee this is where trading will start".

Update by Gordon Childs, Editor, CleanFinancial
10-Oct-13 [11:40am]

Royal Mail Revitalises the Small Investor

It's been a long time since an IPO has attracted so much interest from the small investor as the UK government looks to offload a 62% stake in an institution that even Margaret Thatcher baulked at selling.

The amount of interest in this share issue, particularly from small investors is welcome news at a time that has seen the culture of investing, and the financial industry here in the UK come under sustained attack over the last five years, from all parts of the political divide.

It would appear that despite all the political propaganda about the casino city, the culture of risk taking remains alive and well in the small investor community in the UK with people still keen to take considered risks with respect to stock market investments.


Times have moved on since the 80's with the advent of electronic communications and the internet which has made a lot of the Royal Mail's historically day-to-day functions largely unprofitable which has seen the company haemorrhage cash in the face of tough competition from private companies like TNT, UK Mail, as well as parcel companies UPS and FedEx.

The restructuring of the business over the past few years has been a slow and at times painful process; with the pension scheme in particular a big concern. This problem was overcome by virtue of the UK taxpayer taking over the liabilities to make any float much more attractive.

As with any business, Royal Mail needed to evolve to combat the changing environment that it operates in and the sale is controversial particularly with the unions, who fear that its working practices will come under scrutiny, and there is a risk that subsequent strike action could disrupt the day-to-day running of the business, unless the company's employees can be brought on board.

This does appear to be the case with early indication suggesting that a significant majority of Royal Mail employees have taken up the offer of free shares (see below on 8 Oct 2013)

Furthermore fears of industrial action don't appear to have perturbed small investors who have subscribed to the share issue in record numbers, with the pricing of the shares expected to come in at the top end of expectations at 330p when the shares start trading next week.

Is Royal Mail Correctly Priced?

Spread Betting on Shares

There has been criticism in some quarters that the business is being sold off too cheaply, but as we have seen in previous IPO's the pricing can be a tough juggling act, between being pitched too high, and seeing low demand for the issue, or being pitched too low and inviting criticism that it is being undervalued.

In any case when trading starts in earnest, the turnover in the shares is likely to be intense.

Any upside in the shares could well be limited in the short-term as some small investors might feel compelled to stag the issue and take some quick profits, which could make early dealings quite volatile.

Whilst the stock won't go unconditional until Tuesday of next week, the LSE debut will take place this Friday, with hundreds of millions of shares likely to change hands early on.

Long-Term Investors

For long term investors, depending on how many shares get allocated per head, there could well be some mileage in sitting tight given that early indications would suggest that any dividend income could come in at the upper end of expectations.

Whatever the outcome next week with respect to the sale, the increase of IPO's this year marks a welcome change in investor confidence after an extremely tough few years for small investors.

Update by Michael Hewson, Senior Market Analyst, CMC Markets
10-Oct-13 [10:25am] Royal Mail took delivery of 700,000 individual applications for shares this week, which leaves them 7x oversubscribed, helped by an expected pop on the opening of trading as well as a 6% dividend.

371 of the 150,000 postal workers weren't so keen and decided not to take up their free allotment of shares.

Update by Matt Basi, Head of Sales Trading, CMC Markets
10-Oct-13 [8:10am] Royal Mail Underpriced by 80%, says broker as Cable defends sale.

Hundreds of thousands of private investors will get the bare minimum of shares in Royal Mail flotation as evidence mounted that the Government has inadvertently created a stampede by selling it off too cheaply (full story in The Times).

Update by Jenna Cutly, Editor, CleanFinancial
09-Oct-13 [10:13am] Applications for Royal Mail shares closed yesterday but the IPO grey markets that ETX and IG are running are still open.

The IG market hit its highest level yesterday at 4150 (?4.15bn).

The market is now back at 3825 to 4025 (?3.825bn to ?4.025bn).

Market Closes on Friday

Note that this grey market closes "at the end of the first day of unconditional trading", which is expected to be this Friday (11 Oct 2013).

Alternative Market

The ETX market is running a little higher than IG, yesterday it hit 4128 (?4.28bn) but it's currently trading at 3951 to 4151 (?3.951bn to ?4.151bn).

Update by Gordon Childs, Editor, CleanFinancial
08-Oct-13 [5:32pm] 99.75% of Royal Mail Staff Accept Free Shares

A good story on the BBC today states that only 368 of Royal Mail's 150,000 staff have not accepted free shares as part of the IPO.

That should help reduce the risk of short-term strikes. Of course, once RM staff can offload their shares (and many will) then the risk will increase.

When RM becomes more efficient and start making staff redundant, then the risk of strike action will increase again. For now though, 99.75% of employees taking part is encouraging.

The ballot for the next strike closes on 16 October and the industrial action could begin on 23 October.

Opt Out

The BBC article notes that "Ministers deliberately opted in Royal Mail staff to the share scheme, so those wishing to reject the offer had to fill out a lengthy form."

Clever work.

Update by Jenna Cutly, Editor, CleanFinancial
07-Oct-13 [2:58pm]

Royal Mail IPO Deadline and Key Dates

Don't forget that the deadline for applying for shares is Tuesday 8 October.

The final price and allocations will be announced on Friday 11 October.

Shares will begin full trading on Tuesday 15 October.

The IG grey market will close at the end of the first full day of trading.

Update by Jenna Cutly, Editor, CleanFinancial
07-Oct-13 [11:13am]

Royal Mail Pricing Update

Since we last looked at the grey market for Royal Mail it has crossed the ?4bn mark.

Grey Market IPO Valuations

  • IG: ?3.885bn - ?4.085bn
  • ETX Capital: ?4.078bn - ?4.178bn

IG Royal Mail IPO Chart

From the chart below, it looks like IG and ETX Capital have seen an increasing number of buyers for their IPO grey markets.

IG Royal Mail Grey Market Chart

Update by Gordon Childs, Editor, CleanFinancial
30-Sep-13 [10:35am] IG Royal Mail Grey Market Rallies

The last 24 hours of trading have seen an upturn in buyers of IG's grey market for Royal Mail, pushing the indicated valuation up to ?3.325 billion.

If this is any sort of indication of how investors will react at launch, it looks set to be an IPO that could be heavily oversubscribed.

Update by Alastair McCaig, Market Analyst, IG Index
27-Sep-13 [12:11pm]

Royal Mail Grey Market Price Update

Following on from this morning's 'Order Books Open for Royal Mail' update (see below), we thought we'd have a quick look at the grey market to see where people are actually trading it.

IG and ETX are both running books on the IPO:
  • IG spread: ?2,960m - ?3,060m
  • ETX Capital spread: ?2,953m - ?3,053m
So the grey market continues to rise.

IG price:

IPO Grey Market

ETX price:

IPO Grey Market

(If you are trying to find the market on ETX, it's easiest to use the search box).

Update by Gordon Childs, Editor, CleanFinancial
27-Sep-13 [11:28am]

Order Books Open for Royal Mail

The UK government has begun taking orders for the postal firm, offering shares at 260p to 330p. That values the firm at between ?2.6bn and ?3.3bn.

The government will dispose of a majority stake, with 10% of shares going to employees and 40.1% of shares to go on sale.

Dividends and Investing

Members of the public must spend at least ?750 to invest.

The government is "aiming" to pay a full-year 2014 dividend of ?200m, which suggests a dividend yield of 6.1-7.7%. Not a bad rate of return "if" the targets are met.

For more details there is a new Royal Mail sale article on Reuters.

Update by Gordon Childs, Editor, CleanFinancial
26-Sep-13 [5:14pm]

Royal Mail Worth up to ?4.3bn

There's an interesting new Royal Mail valuation article on Bloomberg. According to "people briefed on the estimates" the postal firm could be worth as much as ?4.3bn ($6.9bn) when it lists on the stock market.

Apparently, Royal Mail's value (excluding debt) is estimated to be ?2.8bn to ?4.3bn based on research from the banks preparing the IPO. This information comes from people "who asked not to be named because the talks are private".

A number of things occur to me:
  • Clearly the talks aren't that private
  • Unless I'm missing something, I can't see the markets just 'excluding debt'
  • That is a very wide spread
Having said that, if RM IPOs at ?4.3bn I wouldn't be that surprised, we've already seen the Twitter IPO grey market jump a few billion dollars in the last week or so.

Update by Gordon Childs, Editor, CleanFinancial
26-Sep-13 [9:46am]

Royal Mail Share Price Analysis

Naturally, it is much easier to value a company that is already listed on the stock market. There's the current share price, price trends, potentially more accounts/company reports to examine, more analysts' opinions etc.

So how to price up a company before it lists on the stock market?

As part of the fundamental analysis, it is often useful to do SWOT analysis to help weigh up some of the pros and cons.

I like to look at the downside first and there are certainly some risks (weaknesses and threats):
  • How to work with the large, and often union-led, workforce

  • Increased competition, particularly in the parcel delivery business

  • The declining UK letters market

  • After going public, Royal Mail will still be the UK's designated Universal Service Provider (USP). The company will still be regulated by Ofcom and will have to comply with quality of service targets set by the regulator. This includes deliveries, 6 days a week, to all urban and rural UK addresses

  • As the USP, Royal Mail's prices for the Universal Postal Service will continue to be regulated to ensure that they remain affordable. This includes setting limits on 2nd class post and small parcels

Of course there are some upsides (strengths and opportunities), for example:
  • Cost efficiencies of reducing the workforce

  • The increasing parcel business as more people shop online

  • Whilst there will be increased competition in the parcel delivery business the barriers to entry are high

  • For investors who prefer low levels of volatility, the Royal Mail shares could end up being seen as a utility company

  • Despite being the USP (see above), Royal Mail has greater freedom to set prices for 1st class post and large parcels

The above is just a personal opinion and, whether you are buying or shorting, it is intended to highlight just a few of the risks of trading the shares. As always, this is not investment advice.

Update by Gordon Childs, Editor, CleanFinancial
25-Sep-13 [4:33am]

Royal Mail vs the Post Office

Investors analysing Royal Mail should note that Royal Mail and the Post Office are separate companies, with independent Boards.

Royal Mail is the firm that delivers parcels and letters.

The Post Office is "the nationwide network of branches offering a range of postal, Government and financial services".

The Post Office is not for sale (yet).

Update by Gordon Childs, Editor, CleanFinancial
18-Sep-13 [4:12pm]

Royal Mail IPO Grey Market Price Update

Looking at the screenshot of the IG prices below, there's doesn't seem to be much day-to-day price movement in the Royal Mail IPO market.

Royal Mail Grey Market IPO Price

The lack of short-term movement in the Royal Mail market can also be seen in the chart below.

Nevertheless, you can see how the price (IPO estimate) has climbed steadily since mid-July.

Royal Mail Grey Market Chart

Update by Gordon Childs, Editor, CleanFinancial
18-Sep-13 [3:25pm]

UK Postal Volumes

PricewaterhouseCoopers have prepared an interesting report for Royal Mail on future UK mail volumes.

It's fairly easy to digest and makes for a useful read if you want more background on the key deliveries market, Outlook for UK mail volumes to 2023

Naturally it comes with a lot of disclaimers but has interesting UK mail forecasts like this:

UK Postal Volumes Forecast

Update by Gordon Childs, Editor, CleanFinancial
18-Sep-13 [2:52pm]

Getting Information on the Royal Mail IPO and Buying Shares

Readers interested in the IPO grey market, and/or buying Royal Mail shares, should note that there are a few interesting reports on the Royal Mail site:

Royal Mail Group Annual Report and Accounts Documents

Via the above 'investor centre' you can also access:
  • [Royal Mail] Annual Report and Accounts 2012-13
  • Royal Mail Group Limited accounts 2012-13

Update by Gordon Childs, Editor, CleanFinancial
16-Sep-13 [12:42pm] The IG 'Royal Mail market capitalisation' grey market has now moved to ?2830 - ?2930m.

That's quite a move from the IG quote on 12 July when they priced the IPO at ?2152.5 - ?2252.5m.

Update by Gordon Childs, Editor, CleanFinancial
12-Sep-13 [11:18am] Alastair McCaig from IG discusses the upcoming Royal Mail floatation and the potential issues that the company may face.

Update by Alastair McCaig, Market Analyst, IG Index
12-Sep-13 [7:29am] Royal Mail Privatisation Update

Britain embarked on its largest privatisation in decades when it said it would float the majority of the near 500-year-old Royal Mail postal service.

The government said a stock market flotation would take place in coming weeks but it said the size of the sale would depend on market conditions.

Update by Max Cohen, Trader, Spreadex
18-Jul-13 [3:55pm]

Speculating on the Royal Mail IPO

With the upcoming privatisation of Royal Mail, spread betting company IG has introduced a grey market for investors to speculate on the firm's market capitalisation following its IPO.

And other companies are now following in IG's footsteps and you can currently trade the grey market with:
  • IG
  • ETX Capital
Note that as of 18 July, the ETX spread for Royal Mail was: ?2.710bn - ?2.810bn. That is markedly higher than the IG spread on 12 July when they were quoting: ?2.1525bn - ?2.2525bn.

Update by Jenna Cutly, Editor, CleanFinancial
12-Jul-13 [4:16pm]

IG Offer Royal Mail Grey Market

The brief video below offers a little more information on IG's Royal Mail market:

According to the IG trading platform, this market "Settles [based on] the market capitalisation of Royal Mail at the close of the 1st day of unconditional trading. All OPEN bets will be voided if there is no floatation by Dec 2014".

If you are thinking of trading this market, please remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.

Update by Gordon Childs, Editor, CleanFinancial
10-Jul-13 [6:56pm] UK Government to Sell Royal Mail

Estimates for the Initial Public Offering are valuing the company anywhere between ?2.5-3bn.

For more information, please see Government Plans Royal Mail IPO.

Update by Gordon Childs, Editor, CleanFinancial

Readers please note:

Trading Risk Warning
'Royal Mail Spread Betting' edited by Jacob Wood, updated 03-Oct-17

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