Market close: shares drop as investors raise cash for Auckland Airport selldown

New Zealand shares dropped, led by Auckland International Airport, as institutions sold shares to participate in the selldown of the nation's busiest gateway. Hallenstein Glasson and Steel & Tube gained after posting better earnings.

The NZX 50 Index fell 42.46 points, or 1 percent, to 4196.73. Within the index, 29 stocks fell, 10 rose and 11 were unchanged. Turnover was $474 million, making it one of the busiest days this year, reflecting the NZ Superannuation Fund's selldown of its Auckland Airport stake.

Auckland Airport dropped 5.8 percent to $2.77. The so-called Cullen Fund sold 7.6 percent of the airport company at $2.76 apiece overnight, a 6 percent discount to where it ended up the previous day, when it closed at $2.94, the highest since November 2007.

The selloff was driven by "the massive placement in Auckland Airport", says Matt Goodson, portfolio manager at BT Funds Management. "Stocks needed to be sold to raise funds to participate" and the impact was seen across the market.

Infratil fell 0.4 percent to $2.42 after saying it has not made a decision to sell down its holding in Z Energy or NZ Bus, as a media report speculated it would.

Fletcher Building, the biggest company on the NZX 50, declined 1.8 percent to $8.87. Contact Energy dropped 1.5 percent to $5.13 and Sky Network Television fell 1.8 percent to $5.01.

Transport group Mainfreight fell 0.8 percent to $11.99, Freightways declined 1.5 percent to $4.50 and Fisher & Paykel Healthcare dropped 1.7 percent to $2.34.

Steel & Tube, which sells steel building products, gained 4.3 percent to $2.65 after reporting a 14 percent gain in first-half profit and tipping second-half results to exceed those in the first six months of the year.

Hallenstein Glasson Holdings, the clothing chain, gained 2.4 percent to $5.45 after flagging an expected 15 percent lift in first-half profit on "robust" sales in New Zealand.

Michael Hill International, the jewellery chain that bears its founder's name, fell 0.8 percent to $1.22 after posting a 5.9 percent gain in first-half profit on Australian sales growth.

OceanaGold Corp rose 0.7 percent to $3.12. The operator of the Macraes goldfield says profit for the 2012 calendar year more than halved from the previous year despite a 55 percent increase in gold production in the fourth quarter compared to the previous three months to September 30.

Warehouse Group, the biggest retailer on the benchmark index, rose 1.1 percent to $3.54 after government figures showed retail sales volumes rose by a faster-than-expected clip of 2.1 percent in the fourth quarter.

(BusinessDesk)