NZ stocks: Capstone tumble hurts Fletcher Energy

The New Zealand sharemarket had a fairly healthy day's trade for a Monday, although the NZSE-40 capital index closed below 2000 points.

The key index fell 13.18 points, or 0.66 per cent, to 1996.37, while the small companies' NZSE-SCI capital index fell 25.15 points to 5153.05.

Turnover was 65.57 million shares valued at $149.28 million.

Richard Leggat, vice-president of institutional sales at Merrill Lynch, said Fletcher Energy dominated the market but closed down 12c at $9.10, due to weakness in the Capstone Turbines share price in the United States on Friday night.

Capstone fell on the Nasdaq to $US27.50 from $US30.25 after news that it had sold only 5 million shares from a 7 million placement.

Energy leapt 80c on Friday after the Commerce Commission allowed Shell's bid to buy the division.

Fletcher Forest rights led the top 10 by volume with 27.11 million shares valued at a minimal $623,530, but fell 0.5c to 2.3.

"Telecom was a little softer on $5.75, down 5c, but no news there," Mr Leggat said.

"Air New Zealand's downgrade on credit saw the B shares slip a little, and the open skies agreement and talk that the Government might liberalise the ownership laws, which would allow Australian investors at some time to own the A shares, saw the A shares a little stronger," he said.

"They weren't big moves, but that premium the B shares command over the As is likely to narrow if we saw the liberalisation of those laws."

Air NZ A shares rose 2c to $1.48, while the B shares dropped 2c to $1.95.

Standard & Poor's downgraded its ratings on Air NZ to "BB-plus" and "B" from "BBB-minus" and "A-3," although the airline's outlook is now considered stable.

S&P said the downgrade reflected Air NZ's high debt burden, associated with its acquisition of Ansett Australia in June, and greater vulnerability to cost pressures, heightened competition, slowing economy activity, and the risk of significant delays in the successful and timely integration of Ansett.

Among other stocks, Carter Holt Harvey slipped 4c to $1.81, although it went ex-dividend to the tune of 4c so was essentially unchanged.

Contact fell 6c to $2.77, INL was down 5c at $3.30, SkyTV fell 6c to $2.76, The Warehouse shed 18c to $6.60, and Infratil was down 3c at $1.23. Fletcher Forests dropped 1c to 27.

Newly listed Cadmus Technology fell 3c to 15, DB Group was down 1c at $3.60, Ports of Auckland lost 5c to $4.20, and Colonial Motors shed 26c to $2.85 on minimal volume.

Among stocks to gain were AMP, up 22c at $24.76, Lion Nathan, up 5c to $5.65, Montana, gaining 5c to $3.50, and Goodman Fielder, up 16c at $1.76. Telstra rose 15c to $9.00 and Tourism Holdings gained 2c to $1.90.

Hellaby Holdings was down 1c to $1.67 after saying it was raising its stake in retail franchiser Specialty Brands.

Looking ahead, Auckland International Airport holds its AGM today, and Contact Energy will announce its annual result on Thursday.

In the US, analysts believe Wall St bulls will pounce once the long-running US presidential stalemate is settled but the longer it drags on, the worse it will be.

On Friday, the tech-rich Nasdaq composite index closed 4.67 points lower at 3027.21, while the Dow Jones average index of 30 industrials closed 26.16 points, or 0.25 per cent, lower at 10,629.87.

- NZPA