A breathless scramble for shares in the world's first listed brothel

Stock markets around the globe may be in depression, but shares in the world's first publicly listed brothel went through the roof on their first day of trading, proving the old adage that sex always sells.

"Everyone knows sex is a smart investment," said Heidi Fleiss, the former Hollywood madam, who helped launch the Daily Planet on the Australian Stock Exchange yesterday. Investors in the Melbourne brothel saw shares rise from an opening price of 50 Australian cents (19p) to $1.09 (42p) at the close of trading.

The Daily Planet prides itself on a high-class clientele and says it is "like any other five-star hotel", although rooms can be hired by the half-hour. It claims to be Australia's largest legal brothel and has 18 spa rooms, all equipped with ceiling mirrors.

The chief executive, Andrew Harris, said it had been an uphill battle to get the company listed. "The financial establishment did not want a brothel on the stock exchange," he said. "We have fought every institution, every law firm. It has cost us a fortune."

The flotation was also the culmination of delicate financial manoeuvres designed to allow investors to back the project without being prosecuted under legislation that prohibits living off immoral earnings. Mr Harris said the company had never made a cent from the "working girls" themselves, who were paid directly by clients. Instead, its profits were derived from the $115 (£44) an hour room rental.

The promotional brochure for the brothel promises hospital-standard hygiene, noting that "all sex workers are required by law to use condoms and/or dental dams during any sexual activity".

The company has ambitious plans. It wants to open a sister establishment in Sydney, as well as a "sex Disneyland" theme park. Mr Harris, a former special forces officer who describes himself as "a very strong family man", said: "You may be able to have a simulator of a six-mile high club."

Brothels are legal in Australia, but must be licensed by state governments. Daily Planet also hopes to open outlets in Brazil, Colombia and the American state of Nevada.

Ms Fleiss, who served 21 months in prison in the United States for tax evasion and money laundering, sung the company's praises, but was in Melbourne for not entirely altruistic reasons. The former purveyor of call-girls to the rich and famous was plugging her new book, Pandering, and managed to sell 100 copies in parallel with promoting Daily Planet.

About 1.4 million shares were traded yesterday, many of them by "mum and dad" investors from Middle Australia attracted by the promise of a steady 8.4 per cent dividend. The company ignored doom-mongers who warned it was a dire time to go public. "In hard times, people seek companionship and company," Mr Harris said. "I can't think of a better time to go to the market."