Fritz celebrates as shares in Telekom soar

Champagne corks popped, 100 young men in striped shirts surged forward, and the number everyone in Germany had been guessing at for the past six months flashed up on the screen of Frankfurt's stock exchange. At DM33.20 (pounds 13.25) a share, Europe's biggest flotation had got off to a good start.

"A wonderful day for Telekom, for the stock exchange and for German finance," oozed Hilmar Kopper, the head of Deutsche Bank, which led the consortium preparing the state-owned telephone monopoly's partial privatisation. Theo Waigel, the finance minister, was also grinning from ear to ear as he waded into the melee, lapping up this success.

Nearly 2 million Germans who were persuaded to have a flutter on Deutsche Telekom also had a lot to celebrate. By registering with the telephone monopoly's information forum, they had been able to buy up to 300 shares for DM28 each, and yesterday could collect a DM1,600 profit on their investment.

But the hoped-for bonanza did not quite materialise. Too many ordinary Germans had suspended their distrust of the stock exchange and signed up for Deutsche Telekom. Shares had been five times over-subscribed, and had to be rationed.

But the gains should be large enough to lay to rest the ghosts of the past, and persuade Germans that stocks were not just the playthings of irresponsible gamblers and speculators. Ever since the crash of 1929, which wiped out the middle class, shares have been about as respectable as betting slips.

If Fritz - Sid's German equivalent - comes away happy from his first foray into the Borse, the frozen Frankfurt market, where most shares are held by institutions and never traded, might be dragged into the second half of the century.

"This moment is a milestone in the development of the market," said Werner Seifert, chairman of Germany's stock exchanges.

"This is a decisive contribution to strengthening the equity culture among private investors in Germany.''

Some DM100m had been spent to put them into the mood - the largest advertising campaign for the largest share issue, which netted DM20bn for the company in exchange for 26 per cent of its holding.

Even the austere Frankfurt stock exchange had had a face-lift for the day, enveloped in Telekom's trademark pink bunting.

Fireworks launched the issue in New York, where the shares traded briskly on their first day, and there will be even more razzmatazz when Tokyo gets the chance today to add Telekom to its stock. Two-thirds of the shares were allocated to the German market, and the rest sold abroad.

On the first day of trading, about 30 million shares changed hands, suggesting that quite a few punters had no long-term ambitions to participate in the share-owning democracy. Many investment analysts are worried about the long-term outlook for Deutsche Telekom, and had advised shareholders to dump their stock at the first opportunity.

Amid all the euphoria, the Association of Small Investors even issued a warning that the share price would eventually collapse, because it takes no account of the company's massive debt of DM100bn, its ossified work force and its inability to compete in a market that will be thrown open in 1998. After the advertising blitz, the loudest message now ringing in investors' ears is: "Get out while the going is good."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before