A wave of Norwich Union share sales in the immediate aftermath of its flotation has subsided, stockbrokers have reported. The stock reached a high of 355p last month. It fell back by 37p at one stage, last week last week to trade around the

325p level.

A spokesman for Goodbody's Stockbrokers said he expected the financial institutions to step in if the price drops as low as 300p. In the meantime speculators who borrowed large amounts to subscribe heavily to the preflotation share price of 290p have off-loaded their purchases.

"Norwich Union has underperformed. There has been no doubt about that . . .

we are quite surprised that the share price has come back as far as it has, given the recent bull run on the stock exchange," the spokesman said.

But he added that there was an expectation of a price upsurge when the listing is linked to the FT-SE 100 in September. Small subscribers were holding on to stock and policyholders had held on to their free shares as "a little retainer", he said. Davy Stockbrokers, which is operating the special Norwich

Union Share Account, says sales had been slow, in comparison with the flotations of Halifax and Alliance & Leicester. A spokesman said that about 10,000

policyholders had availed of Davy's special postal service for share account holders.

A total of about 150,000 Irish policyholders received 62 million free shares, valued at over £200 million sterling.

"In general the market has been doing well, so there has been no incentive to get in and sell quickly," Mr Flynn said. In addition, speculation on a take-

over, possibly by Australian insurers AMP, had added to coyness of potential sellers. Dealers in London played down any expectation of a share price surge in September when the Norwich Union shares will join the FT-SE Index. But they have not ruled out the possibility of "a flicker" in the few days after listing.

"Members have been selling in reasonable numbers with about 10 million shares traded every day so far. There is more volume in Norwich Union shares than the rest of the sector put together," one dealer commented. Because a significant number of members are likely to remain sellers for a long period, the shares are unlikley to move strongly ahead, he suggested.

Institutions which were initially allocated about 20 per cent of the shares now have a stake of about 30 per cent so the stock shortage is not so great, another dealer said.

Suggesting the shares are overvalued at current levels based on business performance, one dealer said a price of 270p to 280p would be a fairer valuation. Meanwhile, following complaints to the media about share applications remaining unprocessed, Norwich Union moved to reassure subscribers that the applications for specially discounted shares would be dealt with to their satisfaction. The Dublin office has appointed a special Complaints Officer to deal with flotation problems.

"The whole focus from our end is to solve issues like this to the client's satisfaction," a spokesman said.

People with complaints are initially requested to contacts Lloyds Bank, which has the share register. But the spokesman added that, although less than 100

complaints were received from 150,000 subscribers, he recognised that if someone had a problem, it tended to be a big one. "It may take from four to six weeks to solve their problem," the spokesman said. One policyholder told The Irish Times he had certification from SDS that his application was received by Norwich

Union, but his cheque had not been cleared nor had he received any reply. He had applied for 2,800 shares at the policyholder's discount price of 265p, 25p less than the public offering. "Quite frankly, no one is willing to take responsibility in Dublin for anything . . . we may as well be an offshore island," he said.

The special price offer was oversubscribed by a factor of four in June after policy holders received their free allocation of 150 or 300 shares, depending on whether they had with profit policies. Applications were, on average, for

£6,000 worth of shares, but those who applied for the maximum allocation of £112,500 received just £10,000 worth. Norwich Union has recently received an Aa3 financial rating from Moody's, the international ratings agency.