As the financial sector became mired in the early 2016 market sell-off, the likely became inevitable: the government has called off its public sale of shares in Lloyds Banking (LLOY). “We will wait for those financial markets to settle down before going ahead,” the chancellor George Osborne wrote to the scores of private investors that had signed up for email updates on the sale.
The move is hardly surprising: as we noted in our Tip of the Year (Buy, 72p, 7 Jan 2016), the share price had already moved below the government’s break-even price, and there was a further discount to the market on the table. Indeed, it was the fall in the share price over 2015 that triggered our recovery tip, with the related promise of a decent prospective dividend yield.