Shares in Eircom, the privatised Telecom Eireann, have soared on the Dublin, London and New York markets ahead of the company's debut half-year results next Thursday. Brokers reported very heavy trading in Eircom shares which closed up 33 cents on €4.30 in Dublin and up 30 cents to €4.27 in London where almost 4.5 million shares traded. At that price, the shares are at their highest level since the end of August.

While yesterday's closing price of €4.30 is a long way off the post-flotation high of €5.00 last July, it is equally well above the €3.67 low for the shares of mid-September. After being floated in July at €3.90 when more than half a million private investors bought shares, Eircom stock soon lost its attraction and fell sharply in August-September before recovering some ground in recent weeks.

Dealers said that yesterday's sharp rise in the share price is in anticipation of a strong set of half-year results on Thursday, and a belief in some quarters that those results will give the shares the impetus they need to move higher.

Despite a series of major corporate moves in the European telecom sector, Eircom shares have failed to match the gains in the sector, and have been hindered by an expectation that a 5.1 per cent shareholding by Telia will find its way on to the market.

Telia currently has a 14 per cent stake in Eircom, but is expected to sell this as its merger partner, Telenor, has a large sharehlolding in Eircom's rival in the mobile phone market, Esat Digifone. Telia's partner in Eircom, Dutch telecom group KPN, is expected to buy 8.9 per cent of the Telia stake to take its shareholding in Eircom to 29.9 per cent, with the remaining 5.1 per cent of Telia's holding in Eircom being sold on the market. Davy Stockbrokers is expecting half-year profits of €564 million from Eircom, although this forecast includes the estimated €400 million profits from the sale of Eircom's 75 per cent stake in Cablelink to NTL.

Excluding this profit and stripping out flotation costs of €15 million, some Y2K and rebranding costs, as well as €30 million in rationalisation costs, then Davy is forecasting "normalised" pre-tax profits of €209 million and earnings per share of 6.4 cents.

For the full-year, Davy is expecting profits of €755 million and earnings per share of 26.1 cents.