Deutsche Telekom shares fell sharply on the Frankfurt market yesterday coming close at one stage to the €63.50 price at which most retail investors bought into the global offering of shares. After touching a low on the day of €63.51, the shares closed at €63.64.

Retail investors who applied for shares before June 9th in the Deutsche Telekom global offering got a €3 discount on the market offer price of €66.50 per share.

Following the performance of the shares since the latest tranche of 200 million was released last week, retail investors who bought in at the discount price are now looking at a paper gain of just 14 cents per share. But investors who paid the full price of €66.50 per share are nursing paper losses of €2.86 per share.

Deutsche Telekom shares opened at €65.50 but fell sharply in early trading yesterday. Telecoms stocks generally were out of favour on international markets on concerns about the spiralling cost of third generation mobile licences and increasing competition in fixed-line markets. Some market analysts consider telecoms shares as overvalued given the competitive pressure in their market.

Within an hour of opening Deutsche Telekom shares were more than 3 per cent down at €63.65. After a volatile day the shares closed on the days low of €63.51. Before the latest tranche of shares came on the market DT shares were trading at €67.

In a research summary of international brokers' views on DT quoted by Internet site Yahoo, the shares were rated a strong buy by six brokers, a moderate buy by five and a hold by five. Four brokers described the shares as a moderate sell but there was no "strong sell" recommendation. Some 5,500 Irish retail investors applied for €100 million worth of shares in the group's recent offering of 200 million shares. With about 700 million shares applied for in the global offering, the offer was 3.5 times oversubscribed. In the scale back of the allocation each retail investor got 25 shares plus 20 per cent of the amount applied for over the 25 share minimum amount. In the Irish market the average amount sought was €20,000 or £15,700.