Royal Mail share investors set to make £300 profit with new price surge

The golden oppotunity for investor profit from Royal Mail shares continued as prices surged to 44% above the original selling price. Photograph: Facundo Arrizabalaga/EPA

Hundreds of thousands of small investors could make a profit of more than £300 on Royal Mail stock on Tuesday morning following a further surge in the company's shares on their second day of trading.

Around 350,000 shareholders who bought their stakes through a government website – out of a total of 690,000 retail investors – receive their share certificates on Tuesday, allowing them to cash in on the float's instant success.

The shares, which the government sold for 330p on Friday morning, closed at 475p on Monday night – 20p higher than at the end of trading on Friday. The 44% jump in the launch share price means that 227 shares bought from the government for £749.10 – the allocation for every retail investor – are now worth £1,078.

Danny Cox, of stockbroker Hargreaves Lansdown, said he expected Tuesday's trading activity to be as busy as Friday, when more than 100m shares were traded in the first hour. David Jones, chief market strategist at spread betting firm IG Index, said: "We're expecting a similar level of excitement as in the first hour on Friday."

Those who bought shares directly from the government will have to pay £17.50 to sell their shares online. People who bought through a broker could sell the shares for a fee as low as £12.

Jones said many of the buyers are wealthy individuals who failed to buy any Royal Mail shares after the government decided to block applications from anyone who ordered more than £10,000 worth of shares. "The most active [buyers] are high net worth clients who missed out on the allocations they wanted," he said.

Until now the shares could only be bought and sold via stockbrokers. The company will be fully listed on the London Stock Exchange at 8am on Tuesday triggering "unconditional dealing" – allowing anyone to buy and sell.

About 40 people applied for shares worth £1m or more. City investors, including pension funds and hedge funds, have also been big buyers of the stock after 500 of the 800 institutions that applied for shares failed to get any following overwhelming demand.

The proportion available to institutions was reduced from 70% to 67% to make slightly more stock available to the public. The government said 90% of the shares sold to the City have gone to "responsible institutional investors" such as pension funds. Investors include Threadneedle, Fidelity, Blackrock and Standard Life.

The remaining 10% went to hedge funds, including Lansdowne Partners.

The Guardian understands that 13.5% of the company was bought by foreign investors, including the sovereign wealth funds of Kuwait, Singapore and Norway.

Private investors may be extra keen to sell their shares before the result of a strike ballot of postal workers due on Wednesday afternoon. The Communication Workers Union (CWU) said it is "almost certain" that its 115,000 members will vote for industrial action.

A nationwide strike, the first since 2009, could be held as soon as 23 October. It comes despite 150,000 postal workers making paper profits of more than £900 from the £2,200 of shares they were granted for free as part of the privatisation.

Billy Hayes, general secretary of the CWU, said: "Shares will make no scintilla of difference to postal workers who are far more concerned about their jobs. We expect our members will vote to protect their terms and conditions. It's more important than ever to get protections for job security and terms and conditions under privatisation. CWU won't stand idly by; whoever owns the company will have to deal with us and the workforce."

The union will hold a mass meeting outside Royal Mail's Mount Pleasant sorting office in central London on Tuesday morning to coincide with the start of full trading in the company's shares on the Stock Exchange.

Brokers said the threatened strike action – which could lead to days of disruption in the run up to Christmas – has already been factored into Royal Mail's share price. The attraction of a 6% dividend yield could also persuade retail investors to hold on to their shares rather than sell them, despite a note from analysts at Canaccord Genuity arguing that the shares should be priced at 599p.

The soaring share price, which values Royal Mail at £4.7bn compared with the government's maximum £3.3bn valuation, has fuelledaccusations that the government sold off the 500-year-old company too cheaply.

Ed Miliband, the Labour leader, said it showed the privatisation was a "fire sale of a great British institution".

Chuka Umunna, the shadow business secretary, said the government had "massively shortchanged" taxpayers by significantly undervaluing the institution.

If the government had sold the shares at 450p, rather than 330p, it would have made an extra £600m for the taxpayer on top of the £1.7bn it made from the 52% stake in Royal Mail.

The government's pricing of Royal Mail will be investigated by both the National Audit Office, the public spending watchdog, and the public accounts committee