The fallout from the disappointing initial public offering of France Telecom's Orange mobile phone subsidiary intensified yesterday as shares in European telecoms firms continued to fall.
Orange closed in Paris at €8.81, 12 per cent lower than the issue price for institutional investors and 6 per cent down on the day. In London, the shares closed at 559p sterling against the retail offer price of 607p. Analysts said the dismal debut was a catalyst and consequence of the sector-wide malaise. Worst hit were France Telecom, down 8.5 per cent to €72, and Finland's Sonera, down 8.6 per cent to €14.95.
Deutsche Telekom fell 6 per cent to €28.65. Vodafone, the mobile market leader, fell 2.8 per cent to a 23month low of 210p, dragging the FTSE 100 down 52.3 at 6,176.2.
It had been hoped last week's 17 per cent cut in Orange's offer price range would lead to a successful debut. Instead, investors have continued to be nervous over the sector's debt levels and the prospects for the third-generation networks.
"The sector is suffering from a lack of positive news on all fronts," said Ms Karen Robertson, investment director at Standard Life Investment.
Morgan Stanley Dean Witter, appointed stabilisation manager to support the share price, declined to comment yesterday on when or if stabilisation would take place.
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