The government's impending sale of its remaining stake in Natwest has raised concerns, with the head of the FTSE 250 wealth manager warning of potential risks associated with retail investors' increased exposure to a single share.
Stephen Levin, chief executive of London-listed fund manager Quilter, criticized the government's strategy, describing the sale of Natwest shares as too “isolated” to have a meaningful impact on revitalizing the stock market.
In an interview with City in the morningLevin expressed concerns that the sale might deter investors rather than attract them.
Although government officials see the sale as a pivotal moment akin to Thatcher's “Tell Sid” campaign to privatize British Gas, Levin is wary of promoting NatWest shares as a unique investment opportunity. He stressed the importance of diversification in investment portfolios, stressing the need to follow a balanced approach in dealing with stocks.
Uncertainty hangs over the timing of the sale, with questions emerging over whether plans will go ahead as scheduled this summer. Last March, ministers reduced their stake in NatWest Bank to less than 30 percent for the first time since the bank was rescued during the financial crisis. In addition, Natwest shareholders supported measures that would allow the bank to buy back more shares from the government.
Initially, the retail investment platforms were to facilitate the distribution of Natwest shares in the market. A Treasury spokesperson confirmed the government's commitment to promoting a saving investment culture and expanding UK share ownership through the retail offer of Natwest shares. However, they stressed that individual investors would have discretion to participate in any potential offer, with the government adhering to relevant marketing requirements.
As discussions continue, concerns remain about the potential implications of the sale of Natwest and its alignment with the broader objectives of stimulating retail investment and market participation in the UK.