CITY AND SUBURBAN
Don't wait for the state to step on your privatised gas
CHRISTOPHER FILDES
istory suggests that it pays to get
H
nationalised. What luck to have been bought out of railways or mines in the 1940s, steel in the 1960s, merchant ship- building in the 1970s! Even the bit of paper You got in exchange (transport was bought out on a three per cent stock, to be redeemed at par the year after next) would have proved a less bad investment — but, of course, you passed it on before it could burn your fingers, you took your money, and ran. Old City hands (which nowadays means those who can remember what happened last week) are working up a head of nostalgia in front of the world's biggest share issue, for British Gas. A wonderful stag, old boy, say the punters in the Short Bar: if it goes wrong, that fellow Kinnock will give you your money back: you know, that lot aren't so black as they're painted, we had one of them in to lunch the other day, what was he called . . . ? The City attaches an exaggerated importance to the healing powers of lunch. To have your Privatised shares re-nationalised at the price you paid for them is meant to be a threat, not a promise. Not even after lunch Will the government give investors all their money back on those victims of the oil slump, Britoil (first offered at 215p, now trying to stay above 100p) and Enterprise Oil (offered at 185, now below 100p). With Telecom, repayment is still a threat, but not the threat it was. The shares, offered at 130p, touched 278p earlier this year but have since lost almost a pound — on the Prospect of genuine price-cutting competi- tion on the business tariff, while a low inflation rate holds the domestic tariff down. Before political threats or promises can come into it, the investor being per- suaded to chance his arm with British Gas has been shown that buying a privatised share is no longer as good as finding money in the street. No more it should be. But for the Government, with altogether too much tiding on the success of the British Gas issue, the reminder has been awkwardly timed. Analysts have been set to crawl over the Telecom's register, to see what the small shareholders have done. Have they just tucked their share certificates behind the clock? Are they actively sulk- ing? Or, with more spirit, did they pocket some of their profits on the way up — leaving them with cash to roll forward onto another jolly punt on British Gas? The short view was the right view, and may be again. Remember the pattern with Tele- com: first a summer squall in sterling, and upward pressure on interest rates: then policy subordinated to the task of getting Telecom away on a buoyant market, even if that meant taking risks with interest rates and the money supply: then, in the New Year, a reverberating hangover.
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