Investors should hold on to their Eircom shares for the present, with some brokers suggesting that those feeling brave should even consider buying a few more.

After a sharp decline in Eircom's shares, most stockbrokers are advising investors in the company to do nothing for the time being. This recommendation is based on the premise that the value will improve by the end of the year, when the additional shares have been digested and the entire telecommunications sector may be on a firmer footing.

Mr Kevin McConnell, analyst at Bloxham Stockbrokers, says shareholders should expect some further weakness in the shares in the coming months. The placing of KPN and Telia's 770 million Eircom shares in the market will depress the share price for some time yet.

In the longer term though, Mr McConnell says the key selling points which attracted investors into the shares in the first place - particularly the strong earnings potential - will underpin success.

Mr Eamon Leonard, analyst at BCP Stockbrokers, is also advising investors to hold on to their shares and says those who want to buy more need not hurry.

Dolmen Butler Briscoe has issued a buy recommendation for investors on the basis that at current levels the shares offer good growth potential in the long term.

On the downside, some market analysts point to the very bad timing of the share placing, coming at a time when the major European telecommunications companies are also placing shares to raise money to fund third-generation mobile phone licences.

The fact that the 770 million shares are now being placed would also suggest that Eircom has failed to impress a trade buyer and most analysts believe it will be some time before a buyer for the company emerges.