Small-time stock-market investors today seemed to be avoiding warnings from some analysts and investment advisers to steer clear of the listing of insurance group Direct Line.
The deadline for those wanting to take part in Thursday’s float passed at 12pm today, with stockbrokers reporting strong interest.
Royal Bank of Scotland was forced by politicians in Brussels to offload the insurance subsidiary, which also owns Churchill, as a condition of receiving a £45 billion bailout from taxpayers during the financial crisis. Hargreaves Lansdown said applications had “run into the thousands” while rival broker The Share Centre said demand had soared at the weekend.
Critics of the float point out that making profits from car insurance is notoriously tough, and the Competition Commission inquiry into the industry can hardly be good news. Royal Bank of Scotland hopes to raise up to £975 million.
Up to 500 million shares, priced at between 160p and 195p, will begin trading on Thursday. At the mid price, that would give Direct Line a value of £2.66 billion.
