NZ stocks: Shares ease, Air NZ takes a reality check

The New Zealand sharemarket eased slightly today as the leading stocks put on a mixed performance and Air New Zealand shareholders took a reality check.

The benchmark NZSE-40 Capital Index closed down 11.54 points, or 0.59 per cent, at 1945.80 on turnover of 28 million shares worth $75 million.

Air New Zealand eased 4c to 52c as the profit hawks set in following yesterday's announcement Qantas is looking to pump $NZ550 million into the airline in exchange for a 22.5 per cent equity stake.

"It was a bit of a reality check today," ABN Amro Craigs retail equities dealer Nigel Scott said.

"A lot of decisions have to be made over an extended period before we get to see what the final deal will look like for Air NZ."

The deal is subject to Government and then regulatory approval on both sides of the Tasman - a process that will take at least a couple of months.

Activity on the broader market was mixed, with falls narrowly outpacing rises by 46 to 43 among the 131 stocks traded.

"It is still a relatively featureless market. It was fairly quiet outside of a few main stories," Mr Scott said.

Leading the downside were Auckland International Airport, ex-dividend stocks Fisher and Paykel Healthcare and Sky City, and Contact Energy.

Auckland International Airport eased 23c to 512 on shares worth $3 million as investors mulled the outcome of the pending sale of a big chunk of the company.

Auckland City Council is due to run a book-build process on its 26 per cent stake in the airport ahead of a council decision on the sale on December 5.

"People still have an assertion that that deal will be completed before the end of the year," Mr Scott said.

F&P Healthcare, which went ex-dividend to the tune of 23 cents per share yesterday, was down 10c at 1030, while casino operator Sky City closed 4c lower at 761 after shedding a 20cps dividend.

Contact Energy was a cent lower at 388 after announcing it plans to enhance its corporate governance to help avoid following its parent, Edison Mission Energy, in suffering a credit ratings downgrade.

Standard & Poor's yesterday downgraded Edison by three notches to BB-minus, its third-highest junk rating. S&P later placed Contact's five-notch higher BBB-plus rating on creditwatch negative.

Rail operator Tranz Rail closed up a cent at 96c after going ex- its five for seven rights issue yesterday which pushed the stock to a fresh all time low. The rights closed up 2c at 22c.

"It's basically tracking the 75c differential (between rights and head shares). People have their entitlement letters so decisions will be made on whether to take up the rights from here," Mr Scott said.

Tranz Rail is raising $66 million in the underwritten rights issue to help it pay off debt and provide extra security to the Aratere interisland ferry leaseholders.

Among the other leaders Telecom closed up a cent at 472, Carter Holt Harvey was a cent lower at 166, Fisher and Paykel Appliances was 5c higher at 1065, The Warehouse fell 5c to 735 and Fletcher Building eased 5c to 318 .

- NZPA