Eircom shares have fallen to their lowest level since the July flotation and, at yesterday's closing price of €4.05 (£3.19), are just 15 cents ahead of the €3.90 flotation price. The performance will come as a disappointment to the hundreds of thousands of investors who put their money into the Eircom flotation and have held their shares. However, two major stockbroking firms have predicted the shares are set to improve in the months ahead.

While it has sold all its shares, the Government will be closely watching the Eircom share price as the experience of private investors with the shares will affect their attitude to further flotations. Any sustained weakness in the price could make investors less willing to invest in future sales.

The next flotation of a State company on the Stock Exchange is due to be the float of the merged TSB and ACCBank next year.

The next major privatisation which is likely to attract a high level of public interest is Aer Lingus. In an interview in today's Irish Times, the Minister for Public Enterprise, Ms O'Rourke, said the likely time for a flotation of the State airline would be late next year, or possibly early in 2001.

She emphasised that this would depend on market conditions at the time and that there was no way that Aer Lingus would be sold off cheaply.

ESB is seen as another likely candidate for flotation in the medium term. It is due to report to the Minister on its strategic options by the end of the year.

The Aer Rianta board has also recommended to the Minister that 49 per cent of the company be floated over the next two to three years. Ms O'Rourke appears cautious at the prospect of a part-privatisation of the airport authority ahead of the receipt of a report from consultants she has asked to advise on the issue.

There is no point turning a State monopoly into a private sector one, she said, signalling that the Cabinet would consider in the months ahead the issue of introducing competition to Dublin Airport.

This would be difficult to achieve, the Minister said, with planning issues likely to delay any new airport development - such as Baldonnel.

The flotation of Telecom Eireann - now Eircom - led to strong initial gains for investors and a windfall to the Exchequer. Eircom shares peaked at €5.30 immediately after the flotation and were trading as high as €5.00 in late July.

Since then, however, the shares have fallen heavily in line with the weakness in the telecoms sector across Europe. Eircom's fall has been accentuated by the fact that, even at yesterday's levels, it is trading at a substantial premium in terms of earnings before interest, tax and depreciation to virtually every other European telecoms company.

Eircom's broker, Goodbody, has produced a report stating that the current weakness in the share price represents a buying opportunity and that the share justifies a premium rating.