Contact Energy has toppled Telecom from the No 1 spot on New Zealand's Top 10 companies list by market capitalisation, but collectively the group of 10 have averaged a more than 17% decline in share values during the past 30 days.
During the past fortnight, the major world sharemarkets have booked some of their single largest losses in decades, alternating with some record daily gains, but overall shedding billions in value despite governments across the world pumping trillions into failing banking systems.
Some overseas company losses have topped more than 40% during that period.
ABN Amro Craigs broker Peter McIntyre said Telecom offered "no compelling reason to own any stock".
Since listing in 1991 at $2.28, it hit a high of $9.83 in February 1999 and had reigned as the largest company by market capitalisation most of the time, often accounting for up to 33% of the NZX's daily trading.
However, its market capitalisation has shed about 66% of value to about $4.07 billion, and after three days' hammering this week it was displaced, overnight, for the first time by Contact Energy, the difference between the companies being about $400 million.
Mr McIntyre said Telecom had largely been underpinned by large institutional and overseas investors, some of whom would have had to hold a percentage of telecommunications stock in their portfolios.
"Telecom has been battered by regulation, an increasing amount of competition, and currency plays by overseas investors who are exiting as the New Zealand dollar falls," he said.
It is to be split into three divisions and this week announced a larger-than-expected capital expenditure programme for its new mobile network - $574 million on wideband CDMA technology - part of a total $2.4 billion capital expenditure during the next two years.
Mr McIntyre said the extent of capital expenditure would probably affect the levels of dividends in the future and business growth could be "crimped" by the spending.
Telecom shareholder Elliott International yesterday raised concerns about the way Telecom intends paying for the new mobile network, NZPA reported.
In a series of questions sent to Telecom, Elliott, which owns about 3% of the company, said: "Does the [Telecom] board seriously believe that issuing more stock, with the stock price at an all-time low, is beneficial to shareholders?"Telecom is to run a dividend-reinvestment plan which, it indicated, could help fund the network.
It also advised it expected profit to be lower than previously thought, because of costs and deregulation related to the project.
