Page last updated at 22:51 GMT, Thursday, 17 December 2009

Citigroup shares fall as the Treasury pulls out of sale

A taxi passes in front of Citigroup's offices, New York
Citigroup's new stock was greeted weakly by investors

Shares in Citigroup have fallen 7.3% after the US Treasury said it was delaying plans to sell part of its stake in the troubled bank.

Citigroup said on Wednesday it would sell shares at a steep discount to raise the cash it needs to repay $20bn (£12.4bn) of the bail-out it received.

The Treasury, which owns almost 34% of Citigroup, said the $3.15 a share price was too low for it to participate.

This is because it is less than the $3.25 the government paid per share.

The US Treasury was planning to sell a $5bn stake in the bank during the share sale.

The government now plans to sell its entire stake, about 7.7 billion shares, over the nex 12 months.

Shares in Citigroup have fallen every day this week.

"The fact the government did not sell their stake was a sign there was really limited market appetite," said Nick Kalivas of MF Global in Chicago.

"Now you have this government share sale hanging over the market."

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