First Active shares put in a strong performance on their first day's trading, gaining 65p to close at £2.90 each. For members who received 450 free shares each, the rise in the share price increases their value from £1,012 to £1,305. The shares moved ahead in stronger Dublin and London markets, with financial stocks recovering some ground. At the start of business, First Active immediately rose from £2.25 to £2.45 and steadily increased in value before settling at a high of £2.90.

First Active group managing director, Mr John Smyth, said he was very pleased with the shares performance. "We picked a good day to come to the market. It's been a very good day for us."

The surge in the share price means substantial paper gains for those members who subscribed for additional shares at the 225p issue price. It also illustrates the extent of the profits potentially available for First Active's three senior executives, who receive substantial share options under the terms of the flotation. Mr Smyth can purchase 350,000 First Active shares at the issue price of £2.25. While the options are not exercisable for three years, the rise in the share price yesterday yields an immediate paper profit of £227,500. Group managing director, Mr Tony Shanahan's options yield a paper profit of £162,500, while group operations director, Mr Paul Reville, gains £113,750.

Mr Smyth is confident the share price will continue to make progress. Notwithstanding the volatility in world stock markets, First Active's fundamentals are very strong and should support the shares in the long term, he said.

The strength of the shares in the market has led analysts to state they had been issued too cheaply. First Active was anxious to ensure the shares would not be dragged lower when they began trading at a time when the main financial stocks were all losing ground. It had indicated last month to members the shares would be issued at between £2.65 and £3.80, but was forced to drop the price by a further 40p in response to the continued decline in value, particularly of financial stocks, in the Dublin market last week.

Analysts are advising the societies former members to hold on to their shares for a while, until share prices stage a solid recovery. More than 13,000, or 7 per cent of First Active's former members opted to immediately sell their shares and will receive the issue price of £2.25 each for them. They will receive their cash over the coming days.

Meanwhile, those who subscribed to buy additional First Active shares will only receive a portion of the amount applied for because of the huge demand for the shares. Confirmation of these share allocations will be posted later this week together with a full refund. Irish investors who have received free shares from the flotation of the Irish Permanent and Norwich Union have largely held on to their shares. Irish Permanent estimates that around 60 per cent of its former members still hold their shares while 80 per cent of Norwich Union's Irish policy holders who qualified for free shares last year still retain them. Through the flotation, First Active has raised £104 million. Qualifying former members of First National have until October 6th 2001 to claim shares