Contact sale sends NZ shares into retreat

  • 04/08/2015
Contact sale sends NZ shares into retreat

The New Zealand sharemarket has retreated, as investors sold down their holdings to participate in the bookbuild for the 53.1 percent of Contact Energy being offloaded by Origin Energy at a discount.

The S&P/NZX 50 Index fell 24.09 points, or 0.4 percent, from its record level to 5933.76 today.

Within the index, 33 stocks fell, nine rose and eight were unchanged. Turnover was $155 million.

Contact shares remained suspended, having traded last yesterday at $5.02 and the sale price for the Origin stake set at $4.65 a share.

"Who would have thought in the last five years that Contact Energy would be offloaded by Origin at a price of $4.65?" said Grant Swanepoel, head of research at Craig's Investment Partners.

"It's not a desperate price, but it's certainly a willing seller."

"I would be surprised if knowledgeable investors were not looking for a piece of this at this price."

Prices for the most liquid stocks on the bourse, such as Spark New Zealand, fell as investors organised to fund purchases of Contact stock, with some 389.3 million shares worth $1.8 billion to be laid off in New Zealand and offshore.

Spark dropped 1.7 percent to $2.945.

Other energy stocks lost some of yesterday's gains when the continued operation of the Tiwai Point aluminium smelter Point was confirmed. Mighty River Power shed 3.1 percent to $2.79 and TrustPower fell 1.9 percent to $7.75.

Meridian Energy fell 1.3 percent to $2.29 and Genesis Energy dropped 1.1 percent to $1.75.

Fonterra Shareholders' Fund fell 2.3 percent to $4.69 ahead of the GlobalDairyTrade auction overnight.