Royal Mail shares slump on strike fears

Royal Mail shares were down 3% in morning trading on Wednesday as concerns around workers striking mounted.

After closing Tuesday at 489p, shares had fallen to 475p on Wednesday as investors sold on fears a national strike would be announced by the main postal union.

Polling by the Communication Workers Union (CWU) suggested there would be both a large turnout in the ballot and an overwhelming vote for strike action.

The CWU has urged members to vote yes to the Royal Mail industrial action, which closes on Thursday 16 October.

The union is fighting for protection of employees' jobs, terms and conditions now the part privatisation of Royal Mail has taken place.

It wants agreement for legally-binding protections for the staff's current terms and conditions and to separate pensions from pay deals, ensuring the defined benefits scheme is protected and the defined contributions scheme improved.

If the strike goes ahead it would be the first national strike at the Royal Mail in almost four years and could affect operations over the festive period.

Royal Mail employees received 725 free shares worth £3,545 at Tuesday's closing price - the first full day of trading.

The shares floated at 330p - the top of the government's original range of 260p to 330p - due to the sheer demand from investors to get in on the offer. This means the shares are up nearly 45% since the offer.

Investor view

Users on the Interactive Investors discussion boards were split on whether they should buy or sell today.

Some felt sellers were outnumbering buyers because some private investors were only just getting their reference numbers to be able to trade the stock.

But 'Bazil_Brush' felt it was linked to the potential strikes: "Thank you posties. I've just had a wee top up on the morning dip and almost doubled my holding. I'm looking forward to the first dividend."

The ballot result was expected to be announced at 15:00 on Wednesday.