Market players say they are surprised at the drop in Air New Zealand's share price in the wake of the Government's 20 per cent sell-down.
Shares in the airline were down 5c at 11.30am this morning to $1.60.
The Government yesterday sold 221 million shares in Air New Zealand for $1.65 a piece - the same price the shares were trading at before the company was placed on a trading halt ahead of the sell-down.
Mark Lister, head of research at Craigs Investment Partners, said he had expected the shares to go up in value this morning.
"I was a bit surprised. I thought it would have gone up."
Lister said the lack of discount in the price the Government got for the shares indicated robust demand.
One reason for the price drop could be people selling shares after receiving more than they expected in the book build process, he said.
"Maybe people ended up with more stock than they thought they would."
Lister said international markets had been weak overnight and that was also being reflected by the New Zealand share market.
The benchmark NZX50 index was down 15.05 points or 0.31 per cent this morning to 4847.
Another source who did not wish to be named said the weakness in Air New Zealand could be retail brokers selling some of their allocations back to the market after struggling to on sell them to mum and dad investors.
Retail investors took up 41 per cent of the shares sold by the Government.
"There was quite a big uptake from retail brokers, more than what I expected. It seems some of them might be struggling to sell all of their stock," said the source.
But Lister, whose firm was a key player in selling the stock to retail investors, played down that theory.
"I don't think that is the case. Usually people talk to their clients and get a feel for demand in advance."