Telekom Selloff 5 Times Subscribed

This oversubscription is attributable mainly to the issue's popularity among German investors, but also to tactical ordering by large international institutional investors. With eight days remaining before the allocation of the 500 million shares in the partial privatisation issue, Deutsche Telekom and its advisers are considering how to scale back orders.

The group, which said it would sell 63 per cent to 67 per cent of the issue domestically, intends to cull demand by trying to identify 'quality' investors. Investment bankers said several criteria would be used, the most important being the size of funds under management and the number of shares that the institutions might be expected to buy on the open market if they were not given shares in the first allocation.

Although investor interest internationally appears less enthusiastic, the company's presentations to investors appear to be convincing some institutions which had initially judged the proposed share price range of DM25-DM30 expensive.

Bankers close to the issue attempted to downplay indications of poor demand in the US, where the company has said it would sell at least 13 per cent of the issue.

"In every issue the US investors are slow coming in because they want to hear the management roadshow," said one banker close to the issue.

However, investment bankers said that during the marketing phase of the privatisation, investors expressed their demand for shares at different price levels.

Therefore, the oversubscription hinted at by Deutsche Telekom in Germany may depend on the offer taking place at DM25.