Trading in telephone directories group Yell got off to a bright start yesterday as investors warmly welcomed London's biggest share flotation in two years.

Enthusiasm for the issue - the biggest since insurer Friends Provident listed in 2001 - sent the stock's price as high as 305p in conditional dealings, up from an opening valuation of 285p.

After the initial euphoria, the price subsided a little, to just above 290p in mid-afternoon, with 190 million shares changing hands by noon.

The opening price set by Yell gave the Reading-based company a market value of about £2 billion, which would guarantee its entry into the FTSE 100 Index of leading companies at the next quarterly review.

The group said it was delighted by the first day's trading, adding there had been universal take-up of the shares by institutions and the performance came on a "relatively weak" day in the market.

But the slight fall nevertheless led City bookies to question whether the flotation price was a little too ambitious.

Spread betting firm Cantor Index suggested it could be "a bit rich in the current climate".

Yell set the share price at the upper end of expectations in anticipation of a strong response to what is also Europe's biggest flotation this year.

The offering, which was pulled last year because of market turbulence, has been seen as a measure of improved confidence in the City.

Chief executive John Condron, who has worked for Yell for 30 years, is thought to have made £5.5 million from selling shares in the float.

He said: "We are delighted with the way new investors have embraced the Yell story."

Friday July 11, 2003