Britain’s plans to sell shares in NatWest bank to the public this summer will be a test of a long-awaited upswing in the UK stock market that saw the FTSE-100 hit a record high this week – months after similar milestones for benchmark indexes elsewhere.

Finance Minister Jeremy Hunt hopes the sale of government-owned stock in the bailed-out bank, Britain’s biggest casualty of the 2008 global financial crisis, will spur Britons to invest more in UK-listed companies.

In November, Hunt evoked memories of Margaret Thatcher by saying it was “time to get Sid investing again”, a reference to the marketing campaign the former prime minister launched for the privatisation of British Gas in the 1980s.

By the end of that decade, thousands of Britons held shares in some of the UK’s biggest firms.

But encouraging investors to buy NatWest now, against a backdrop of global geopolitical turmoil and economic uncertainty, could backfire, wealth managers and investors say.

“Despite the FTSE 100 hitting record highs, sentiment surrounding UK investments is pretty low and I think a retail offer is a higher risk option for improving equity ownership and sentiment towards the UK market,” said Dan Boardman-Weston, CEO at BRI Wealth Management.

“Financial literacy is poor in the UK, and we need to address that problem before we can start to tackle the lack of equity ownership by the public. I fear a sale of NatWest to the public is not something to ‘tell Sid’ about,” he added.

The task of attracting more domestic and foreign investment into UK-listed firms has occupied ministers and CEOs for years but progress has been slow, with reforms like a tax-efficient British ISA (individual savings account) still in design.

“It strikes me as a bit of a political stunt,” said Mark Bentley, a director at ShareSoc, one of Britain’s largest associations of retail investors, pointing to the government’s aim to hold the sale in the run-up to a general election.

“Banks are very complex entities to invest in. A ‘tell Sid’ marketing campaign could be very problematic if it makes things look too simplistic.”

Hunt is yet to confirm the sale but UK Government Investments, which manages the taxpayers’ stake, is working with banks and other advisers including ad firm M&C Saatchi on the details, including size, discount and structure.

“Already we’re seeing market research that shows a sale would be supported by all sections of society, particularly young adults and ethnic minorities,” financial services minister Bim Afolami told Reuters by email.

Any sale, he said, would be subject to “market conditions and achieving value for money”.

The government scrapped a similar proposal to sell Lloyds Banking Group stock to the public in 2016, citing poor market conditions triggered by Brexit.

Unlike in an initial public offering, Hunt faces a test to get investors excited about shares they can already easily buy on the market.

What’s more, while NatWest’s stock is still around 40% cheaper than the 502 pence price the UK government paid at its bailout, it has jumped more than 80% since hitting a two and a half year low in October.

“Why should they (investors) be interested now?” said Nicholas Hyett, investment manager at retail investment platform Wealth Club.

A spokesperson for NatWest, which reported a smaller than expected drop in first-quarter earnings on Friday, said decisions on a retail offer were “a matter for the government”.

NatWest CEO Paul Thwaite said on Friday the bank was taking steps to be ready should the UK government push ahead with a sale.

“I think the retail sharing offer, should it happen, is an important opportunity because it further reduces the (government) shareholding,” he told reporters on a call following NatWest’s earnings.

The UK government has already reduced its stake in NatWest to below 30% and wants to fully exit by the end of 2026.

In previous privatisations, like Royal Mail, the UK government had greater freedom to set a price that offered room to rise after the sale. But with NatWest, it is constrained by both market price and recent volatility.

British bank shares have proven tricky investments since the financial crisis, with prices buffeted by the pandemic, scandals and erratic profitability.

To compensate, lenders are striving to rebrand as income-driven investments and, now that higher interest rates are bolstering profit, they are paying handsome dividends to woo long-term shareholders.

NatWest has paid out almost £12.5 billion to investors over the last three years and hiked its dividend per share 26% in 2023.

Banking and investment industry sources say NatWest could time a bumper buyback from the government alongside a retail offer to support the stock.

ShareSoc’s Bentley said he doubted the sale would revive a UK share-owning culture by itself, as most buyers would probably be content to make “a quick buck”.

Data from Calastone shows monthly outflows from UK-focused equity funds hit their highest in more than a year in March, the 34th consecutive month of net selling by investors.

These outflows were recorded just weeks before the FTSE-100 set its record high, underscoring how nervous many investors still feel about British stocks.

Existing NatWest shareholders hope a government exit will erase what some call an “interferencediscount” on its valuation.

“The bank itself is in good shape,” said Richard Marwood, portfolio manager at Royal London Asset Management, one of NatWest’s largest investors.

“The sell-down of the government stake clearly could cause collateral damage to the bank’s public reputation if it doesn’t go well, but it’s outside of management’s control.”

NatWest owns Ulster Bank, which is nearing the end of its withdrawal from the Irish market.