Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Mighty River – uptake down, real estate love affair unbroken

News release

3 May 2013

Mighty River Power – uptake down, prices down, real estate love affair unbroken


Peter Sherwin, Grant Thornton New Zealand Partner, Privately Held Business, looks at the ramifications of the Mighty River Power asset sale which closes today


With applications for Mighty River Power (MRP) closing at 5pm today, a straw poll around the office indicates that the uptake on MRP shares will be lower than the Government first planned.

And if this comes true the sabre rattling by the Greens and Labour may have wiped as much as $400m off the value of the MRP listing by damping the enthusiasm of small investors.

Potential investors may now hold back due to confusion about the future of the power industry, uncertainty whether MRP will stag at a higher price and a fear the price will go down upon listing.

The lack of take up will dampen the listing price, which is more likely to be at the lower end of the scale, around $2.25 rather than the expected $2.80.

The Greens and Labour may have scored political points, but effectively they have slashed the Government’s cash investment to fund health, education and infrastructure programmes.

It will also ensure the Government’s desired “second investment front” remains unopened thereby leaving intact New Zealand’s love affair with the non-productive real estate sector.

So who pays the price for the opposition’s political gain? Every Kiwi, even those they claim to champion.

Professional and institutional investors will not be daunted by any of this and are making big offers, but with fewer "mum and dad" buyers they may not have to go to the market for as many shares when they are listed on 10 May 2013.

This is not panning out the way the Government envisaged and may spook their confidence for future asset sales although reports from The Wall Street Journal suggest the Treasury has called for investment banks to tender for leading roles in the partial privatisation of Meridian Energy and Genesis Energy.

Early trading on 10 May 2013 will be watched keenly by politicians, investors and mums and dads alike for all sorts of reasons and not everyone is going to end up happy…..but just which group is going to be disappointed is the billion dollar question.


ENDS


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fisheries: Report On Underrsize Snapper Catch

The report found that commercial fishers caught 144 tonnes of undersized snapper in the Snapper 1 area – about 3% of the total commercial catch – in the year ending February 2015. The area stretches from the top of the North Island to the Bay of Plenty and is one of New Zealand’s most important fisheries. More>>

ALSO:

Tourism: China Southern Airlines To Fly To Christchurch

China Southern Airlines, in partnership with Christchurch Airport and the South Island tourism industry, has announced today it will begin flying directly between Guangzhou, Mainland China and the South Island. More>>

ALSO:

Dodgy: Truck Shops Come Under Scrutiny

Mobile traders, or truck shops, target poorer communities, particularly in Auckland, with non-compliant contracts, steep prices and often lower-quality goods than can be bought at ordinary shops, a Commerce Commission investigation has found. More>>

ALSO:

Auckland Transport: Government, Council Agree On Funding Approach

The government and Auckland Council have reached a detente over transport funding, establishing a one-year, collaborative timetable for decisions on funding for the city's transport infrastructure growth in the next 30 years after the government refused to fund the $2 billion of short and medium-term plans outlined in Auckland's draft Unitary Plan. More>>

ALSO:

Bullish On China Shock: Slumping Equities, Commodities May Continue, But Not A GFC

The biggest selloff in stock markets in at least four years, slumping commodity prices and a surge in Wall Street's fear gauge don't mean the world economy is heading for another global financial crisis, fund managers say. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news