STOCKBROKERS are cautious on the outlook for Norwich Union shares, believing they are reasonably valued at their current trading level.

NCB's director of private clients division, Mr John Kielthy, suggests that, at the current share price, those with free shares will get a "reasonable" return.

"Shareholders shouldn't be too greedy. Even at current prices, they are making gains of between 50p and 60p on any extra shares they purchased, which already represents a reasonable return."

Shareholders who have borrowed substantial sums from the banks to buy extra shares have seen their allocations substantially scaled back.

They will receive a cash refund, allowing them to repay most of their loans.

This will mean their exposure is limited and they will then be able to decide whether to hold on to the shares they do receive, to try to maximise their return, said Mr Kielthy.

Goodbody Stockbrokers also believes that around the 330p level is a reasonable" price for Norwich Union, and also suggests that the shares make for a solid longterm investment.

The demand for the shares is expected to remain strong, which should underpin the share price.

With Norwich Union now expected to be listed on London's FTSE 100 share index in September, the investment institutions will all be looking to buy shares for the investment portfolios, and will be actively buying up any shares that come on the market.