Moves to raise cash by two of Europe's leading telecoms
companies was seen to prove that an appetite remains for the sector's paper.
Although some analysts remained sceptical as to whether the recent sentiment change in favour of telecoms issues was sufficient to match the sector's debt mountain.
Today's €5 billion equity offering from debt-laden Dutch operator Royal KPN and the €5 billion convertible bond issue from France Telecom sparked falls across their European sector, on fears liquidity would be soaked up.
The Eurostox Telecom sector dipped 1.3 per cent against a positive wider trend, while in London the FTSE's Telecom Services index group was down 1.93 per cent.
KPN initially fell 11 per cent but later narrowed that drop so that by early afternoon it was trading down 3.5 per cent. France Telecom was off lows but still showing a loss of 7.6 per cent.
But analysts said these falls were comparatively modest given the size of the issues, proving the market still has an appetite for risk.
"The response to the issues has been quite positive after the initial knee-jerk slump, showing the market's demand for telecoms shares is at a decent level right now. It proves the sense in both companies making hay while the sun shines," one commented.
AFP