Osborne may delay Lloyds sale due to global markets turmoil

The Chancellor, George Osborne, is considering a delay to the sale of Lloyds shares until the summer after global turmoil in the financial markets sent shares plummeting last week. He had hoped to sell £2bn worth of Lloyds shares to retail investors as soon as March, however, bankers say if conditions are not right, he may be forced to wait until the bank issues its first quarter results at the end of April.

The Chancellor could be forced to put back a sale of Lloyds until the summer after global turmoil in financial markets sent shares plummeting last week.

Fright knocked shares worldwide, with the FTSE 100 index dropping 5.28 per cent, its worst fall for the first week of the year since 2000 – the year of the dotcom crash.

Lloyds shares closed at 68.9p on Friday, below the 73.6p level at which the Government breaks even on its investment.

George Osborne is hoping to sell £2billion worth of Lloyds shares to retail investors as soon as March, but bankers said if conditions were not right then he would have to wait until after the bank issues its first-quarter figures at the end of April.

Lloyds share sale: The Chancellor could delay the sell-off because of global turmoil

Treasury sources insisted the Chancellor was sticking to a promise he made last year that the shares would be sold in the spring, ‘subject to market conditions’.

A Treasury spokesman declined to comment.

A £2.5billion listing of Clydesdale Bank is expected to go ahead in early February despite the turmoil.

Owner National Australia Bank has been buoyed by enthusiastic responses from its investors to the float. It wants to sell 25 per cent of the bank, handing its shareholders the rest. A price range is due to be revealed in the next ten days.

‘This environment is not new, we had a sharp market correction at the end of last summer,’ one source familiar with the deal said. ‘The increased volatility just sharpens investors’ minds.’

Ascential, the publisher of trade magazines including Construction News and Retail Week, is also gearing up for a float, likely to value the group at about £1billion.

It was rumoured this weekend that it could announce its plans as soon as Friday.

The company, owned by the Guardian Media Group and private equity firm Apax, declined to comment.

The market meltdown reflects fears about growth in emerging markets and a fall in the Chinese yuan.

Bad week at the office: The FTSE 100 tumbled in the first trading week of 2016

Share dealing in China descended into chaos last week as an automatic system twice stopped trading when stock prices crashed by more than 7 per cent.

Paul Lynam, chief executive of Secure Trust Bank, said: ‘The Chinese situation is worse than is being acknowledged. Key indicators like the Baltic Dry Index, which measures global shipping volumes, has been consistently falling for months.’

In a further sign of market unease, leading hedge fund Nevsky Capital said last week it was closing its doors.

In its closing newsletter, fund manager Martin Taylor said that poor transparency in China and India were making investing harder and costlier.