With telecommunications providing excellent returns in recent times, it will be hard for Sharetrack investors to overlook this sector. The FTSE Eurotop 300 Telecoms Index is up 16 per cent already this year, following a 91 per cent rise in 1999. A greater focus on increased exposure to the fast-growing markets of mobile telephony and the Internet would appear to represent a key attraction.

Deutsche Telekom is a case in point. Despite facing intense competition in its traditional fixed line market, the German operator's share price has continued to appreciate strongly due to the strong presence it has built up in the Internet sector.

This trend has proved a catalyst for the noticeable growth in such companies spinning off their mobile and Internet operations to enable market watchers to more easily identify the true value of these businesses.

Undoubtedly, Sharetrack investors will be familiar with the ongoing consolidation within the industry. We have already seen evidence of this in the Republic with British Telecom's takeover of Esat, a deal subsequently dwarfed by the massive Vodafone/Mannesmann merger in February.

Another wave of merger and acquisition activity is expected.

At present, the market is rewarding both potential takeover targets, given the possibility of bid premiums, and the acquirers for aggressively seeking to build market presence.

Potential candidates within the Sharetrack list may include Cable & Wireless, BT, Vodafone and Eircom.

Consequently, the focus for Sharetrack players should shift from short-term profitability to assessing how well positioned individual telecommunications players are to capitalise on the long-term growth potential of mobile and the Internet. Share price rises of recent times illustrate the large rewards from calling the right telecom.

Dixons had an 82 for 21 stock split, effective March 8th, 2000. All portfolios containing this stock have been adjusted accordingly.

Please note that Goodbody acts as broker to Eircom

Laura De Voy works as a researcher in the private client department of Goodbody Stockbrokers.