STOCKBROKERS yesterday reported a rush for Direct Line shares as individual investors attempt to grab a stake in the insurer ahead of tomorrow’s flotation.
Online broker Interactive Investor said that it had seen with substantial interest in the offering, the first London floatation open to individual investors since Standard Life in 2006. The firm said that more than a fifth of applications were for the minimum of £1,000, although the average application was around £4,000 and one retail investor requested £133,000 of shares.
Direct Line last night narrowed its range to between 170p and 177.5p, in the lower half of its initial range, a source said last night, ahead of a final pricing due this evening.
Spread betting firm ETX Capital Markets told City A.M. that there was an influx on buyers on their grey market yesterday morning. This pushed their spread – an indication of the expected price per share at flotation – up to 180-190p.
Though the share offering is proving popular with the public, analysts remain sceptical. Barrie Cornes of Panmure Gordon said the firm “is facing an increasingly difficult regulatory outlook, huge pricing pressure and low investment returns for the foreseeable future”.