Tiny Royal Mail allocations see Cable's hopes for long term investors dashed

Business secretary Vince Cable had hoped for Royal Mail shares to go to long term investors - not just those that he thought would want to make a quick buck.

But due to the small allocations granted to retail investors, many are now selling out. As Ishaq Siddiq of ETX Capital points out, with only 227 shares a piece the stocks that retail investors hold are "too small of an investment to really be described by retail investors as a long term holding".

Many of the retail investors wanting to fill their share ISA allowance of £11,520 were snubbed, as those that applied for more than £10,000 in shares were left with nothing. If Cable wanted more long-term investors then those were the ones to look to.

Shares in Royal Mail are now trading around 50 per cent higher than their 330p float price.