Stockbrokers gear up for sell orders

Stockbrokers are bracing themselves for a busy few days as private investors begin to trade their Telecom Eireann shares. The shares closed unchanged at £3.70 (€4.70) in Dublin yesterday as dealing activity began to gather pace. Some analysts suggest the shares could turn marginally weaker though over the next week or two, depending on how many investors decide to take an early profit.

The shares traded in a range between €4.67 and €4.72 (£3.68 and £3.72) during trading before finishing at €4.70 yesterday. At €4.70 investors stood to make gains of around 20.5 per cent on their shares. Some private investors have already moved to sell their shares through stockbrokers or their bank. But as most people will only be receiving share certificates - or statements where their shares are being held in nominee accounts - trading in the shares will begin in earnest from now on.

Most analysts are expecting a significant increase in the number of sell orders and are divided on the impact this will have on the share price in the short term. Ms Yvonne Ruane, of BCP Stockbrokers, says that if a couple of hundred thousand investors decided to sell immediately the share price could fall marginally. Ms Ruane predicts the share price could move between 20 cents and 30 cents (15p to 23p) lower over the next two weeks. Dr Dan McLaughlin, of ABN AMRO, doesn't foresee any softening of the price though, suggesting that strong demand from the big investment institutions is likely to support the share price at or around current levels. All of the big institutions will be seeking to buy-up Telecom shares as they come on the market to build up a weighting in the stock. Under the share allocations, the institutions secured well below their desired holdings of the stock. Irish investors have largely tended to hold onto shares in newly floated companies, with huge numbers retaining share in Irish Permanent, First Active and Norwich Union in recent years. So the extent of the level of selling over the next week will be closely watched.