You are using an outdated browser. Please upgrade your browser or activate Google Chrome Frame to improve your experience. In a financial frenzy not seen since the privatisations of the s, British investors have flocked to buy shares in Royal Mail.

According to Business Secretary Vince Cable, the flotation of the postal operator has attracted aroundapplications from private investors. This has left the retail offer fully subscribed seven times over.

This means that the Government will sell more of its holding than initially expected. Also, in order to satisfy high demand for shares from the public, many institutional investors such as pension funds, insurance companies and hedge funds had their allocations slashed.

The institutional tranche of the offer was more than 20 times oversubscribed. Even so, these corporate shareholders have two-thirds of all shares sold, with the remaining third going to retail investors.

With the flotation massively over-subscribed, share allocations for both private and professional investors have been cut back — drastically, in some cases. Full trading begins on Tuesday 15th October when Royal Mail's official listing begins, but some shareholders will be able to sell from Friday onwards.

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After the stock market closed on Thursday evening, the Government revealed the pricing and distribution of the shares. Initially, HM Treasury expected to price Royal Mail shares in a range between p and p per share.

This has led to accusations that Royal Mail's advisers grossly under-estimated demand for its shares and priced them far too cheaply. Thanks to its juicy dividend, I wrote a few weeks ago that Royal Mail shares offer a 'mouth-watering yearly income' to investors seeking income. In can i buy royal mail shares through an isa, I said that institutional investors with reduced allocations would pile into Royal Mail shares when trading begins, therefore pushing up their price.

Sure enough, the shares — which trade under the EPIC code 'ticker' of RMG — got off to a roaring start on Friday morning. Order free brochures on investing. Unfortunately, few retail investors will be able to sell on the first day, as this is reserved primarily for conditional dealing between institutions. Furthermore, how soon you can sell depends on how you applied for your shares. You will not be able to sell for a few days yet.

What's more, you cannot sell your strategist trading system until you have safely received your 'share account statement'. Applicants via Post Offices will be informed of their share allocations by post. These letters are expected to arrive on Monday 21st October. You may not be able to sell your shares until you have this official confirmation.

In total, 44 different intermediaries stockbrokers and share dealers took part in the public offer, with some websites and helplines crashing as last-minute demand peaked on Tuesday. Each intermediary will contact its customers differently, so visit your broker's website for information on when you can start dealing. Most dealers providing online share accounts will allow you to deal without delay.

It may be wise to deal online, as telephone dealing lines may well be overwhelmed by high call volumes, although some websites crashed repeatedly this morning. Priced at p a share, Royal Mail shares offer a cash dividend worth 6. For those preferring capital gains, you can reinvest these chunky dividends into yet more Royal Mail shares, boosting your holding year by year. You can do this in the usual way via your stockbroker or share-dealing service.

If you decide not to sell out in the early feeding frenzy, then you could well be rewarded for your patience. Previous privatisations, such as the sale of water and energy companies, have produced market-busting returns for investors over the past two decades. On the other hand, investors in Railtrack's float lost fortunes when the network operator went into administration in After years of legal action, Railtrack shareholders won compensation from the Government worth Finally, Royal Mail's share price may take an early dip when industrial action begins, possibly as early as Wednesday 16th October.

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However, the impact of these strikes is likely to be short-lived and, therefore, will barely affect the postal operator's medium-term profitability. Shield your money from the taxman with a stocks and shares ISA.

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