MARKET analysts believe that the Norwich Union share price is likely to rise strongly when the shares begin trading on the London market next Monday. Such is the demand for shares the expectation is that they could initially trade at more than 330p sterling, although opinion is divided on longer-term prospects.
The shares, have traded at up to 350p in London on the unofficial grey betting market, well above the company's indicated range for the flotation price of between 240p and 290p. The shares were quoted at 337p-347p yesterday by City Index, the London financial spread betting company.
But analysts are still suggesting a more "sensible" trading price is likely to be between 325p and 330p. "Predicting the likely-share price at the moment is like aiming for a moving target," according to one broker.
A trading price of 330p would value the 150 free shares given to many policyholders at £495. Those with with-profits policies have received more shares and many policyholders have also subscribed for discounted shares.
The shares are expected to open strongly in London on Monday, following a good recovery in leading British life assurance stocks, such as Legal & General and Prudential over the past week, and amid general confidence over the Norwich Union and Woolwich flotations. The demand from the institutions for the shares will also influence the price, a strong institutional demand further driving up the value.
Most analysts have already revised their forecasts for Norwich Union shares, indicating that they will now quickly rise to up to 330p, ahead of their earlier predictions of up to 310p just last week.
