Shares in Deutsche Telekom hit a 40-month low yesterday, extending a recent slump on fears that investors were circumventing a lock-up agreement to dump stock acquired via the US takeover of VoiceStream.

Telekom stock fell more than 5 per cent to €20.28, its lowest since April 1998.

Fund managers and traders said Telekom, in which many Irish people invested on its flotation, continued to suffer from the placement on Tuesday of 44 million shares by Deutsche Bank - which declined to say on whose behalf it was acting - which re-ignited fears that millions more could hit the market from September 1st.

Market participants said investors now feared that Telekom stock could freely flow on to the market, despite lock-up agreements with former VoiceStream stockholders.