NZ stocks: Falling Air NZ shares dominate sharemarket

Air New Zealand shares continued to spiral downward as the Government refused to make a decision on the airline's ownership structure.

The NZSE-40 capital index fell 5.82 to 2021.41 on the back of a quiet total turnover of $15.2 million.

It was largely led down by market leader Telecom, which fell 4c to 490 after European telcos took a beating overnight. Yesterday it fell 10c to 494, its lowest point since early January.

But all eyes were on Air New Zealand, whose resident-only A shares fell to an all-time low of 75 before climbing back to 80, down 9c, on $1 million turnover.

The unrestricted B shares also fell to an all-time low of 87, before recovering to 91, down 9c, on turnover of $796,464.

This morning's selling flurry occured on the back of a media report that Singapore Airlines had cut the amount it was willing to pay to increase its shareholding in Air NZ if the rescue plan gets Government backing.

Another newspaper reported the Government would not take on the risk of supporting an Air NZ capital raising plan.

UBS Warburg broker Paul Nicolson said that the reports had lifted the uncertainty over the airline's future.

"The selling today is nervous mums and dads...I can see retail brokers panicking out in two-way trading."

Bryon Burke of ABN Amro Craigs Equities said another capital raises was on the cards, as was the sale of Ansett , but this was not likely to be popular, given that Air NZ had already raised capital once this year.

Elsewhere in the market, brokers were watching for two key media results today.

Sky Network Television, 66 per cent owned by Independent Newspapers, reported its June year loss increased to $42.34 million from $26.97 million. It had yet to trade this morning.

Newspaper publisher Independent Newspapers Ltd was steady at 346 after posting a net profit this morning of $26.11 million for the year ended June, well down on the forecast $31 million.

Brokers said the results were in line or slightly better than expected.

Other moves included another newspaper publishing company Wilson and Horton, down 20c to 870; Australasian brewer Lion Nathan up 10c at 550, and Carter Holt Harvey unchanged at 172.

Wakefield Hospital made a disappointing debut on the Stock Exchange, with its shares listing at 249, 1c below the issue price, then falling to 240 in late morning trade.

Wakefield is the stock exchange's first float this year and the first private hospital to list on the New Zealand market.

Falls outnumbered rises 36 to 22 on 105 stocks traded.

- NZPA