Contact Energy urged the NZX to stagger its move to a 'free-float' method of calculating index weightings because of the negative impact on its stock.

NZX will switch to the new weightings in June, stripping out any large blocks of shares deemed not available for trading. As a result, Contact's weighting on the NZX 50 Index drops to about 4.58 per cent from 8.73 per cent, which is likely to trigger selling by index-weighted funds.

Contact is 52.8 per cent owned by Australia's Origin Energy, which the new NZX50 weighting system will ignore under a new approach to strip out cornerstone shareholdings.

Since March 14, shares of Contact have dropped 6.2 per cent while the NZX 50 edged up 0.1 per cent. The shares rose 0.4 per cent to $4.69 today and have dropped from $5.76 a year ago. They are rated 'outperform' based on the consensus of eight analysts in a Reuters survey.

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Contact "understands NZX's rationale for the changes, but submitted that the weightings should change over four-to-eight quarters rather than at a single date," the Wellington-based company said in a letter to shareholders released today. Sales of the stock "are not being driven by pessimism about Contact."

The company said its shares will "better reflect fundamental value" once investors complete their reweighting.

"We remain positive about our future with recent growth in customer numbers, further gains in portfolio flexibility in the next two years, the delivery of the Te Mihi geothermal power station and a diverse range of options available for development as market signals dictate," Contact said in its letter.

The changes will reduce the market capitalisation of the NZX50 by $3.2 billion to $35.98 billion, NZX says.

The new methodology will also have a bearing on the weightings of the four state-owned energy companies being taken public in a sell down that will leave the government holding just over 50 per cent in each.

By contrast, Sky City Entertainment Group's weighting will rise to 6.1 per cent from 5.6 per cent. The casino and hotel operator doesn't have a significant cornerstone shareholder.

Fletcher Building will remain the largest listed company in the index, at a weighting of 12.5 per cent, up from 11.5 per cent at present. The new methodology will apply to all equity indexes from June 15, and an updated document will be released next month.