Telecom Eireann shares remained well supported on the three stock markets where the group is listed, and so far there is no sign that the army of small shareholders is rushing to take a profit on their investment. Yesterday the shares closed up 9 cents to €4.75 (£3.74) and were drawing bids around that closing level.

In London, the shares also closed up 9 cents on €4.76 (£3.75) after heavy trading involving almost 8 million shares. In New York, the Telecom ADR's - which are the equivalent of four ordinary shares - were trading 31 cents higher on $19.50 as the Dublin market closed. Telecom is also trading in a narrow range in New York, between $19.25 and $19.75 Dealers said that trading volumes suggest a steady flow of shares coming on the market from the small investors who received their share certificates or nominee account details last week. "There has been no mad rush to sell, we're seeing a steady flow of stock coming on to the market but nothing extraordinary," said one dealer.

He added that what stock coming on the market is being quickly snapped up, mainly by Irish institutional investors who are willing to pay current prices in the mid €4.70's to build up their Telecom shareholding ahead of the stock's inclusion in the ISEQ Overall Index on Thursday. Telecom is the second biggest stock on the market, after AIB, and will account for 14 per cent of the Irish index.

But international investors are still buyers of the shares in anticipation of Telecom's inclusion in the Morgan Stanley Capital International index later this week. But dealers said that there is no indication that Telecom shares will move out of the current dealing range between €4.65 and €4.75 (£3.66 to £3.74). "Institutions aren't going to pay much above current levels even to beef up their ISEQ weighting, above $4.75 and Telecom shares are getting pricey," a dealer said.