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

 


MightyRiverPower listing to lure unsatisfied offshore buyers

MightyRiverPower listing may lure more international investors on yield demand

By Tina Morrison

May 9 (BusinessDesk) -MightyRiverPower stock may be in demand when it lists tomorrow from international buyers who are faced with low yields in their own markets and didn't receive as many shares as they wanted in the government allocation.

As Europe’s economy shrinks and interest rates in the euro-zone, the US and Japan touch record lows, many investors are seeking opportunities outside their home markets. New Zealand's government yesterday said it had allocated foreign investors just 13.5 percent of state-owned MRP’s shares, after their applications were “scaled considerably,” according to SOE Minister Tony Ryall.

Some 86.5 percent of the shares will be New Zealand owned: 26.9 percent by New Zealand retail investors and 8.6 percent by New Zealand institutions, while the government retains a 51 percent holding.

"Global investors may be interested in buying a bit more," said Andrew Bascand, who helps manage more than $1 billion in equities at Harbour Asset Management. "They are quite attracted to this part of the world."

Shares in the state-controlled electricity generator and retailer will list on the NZX at 12.30pm tomorrow at $2.50 a share. Based on that price, the cash yield is 5.2 percent, said Bascand, whose funds participated in the share offer.

"For global investors, there aren't a whole lot of yields above 5 percent," he said. "Domestically, as the cash yield goes down from 5 percent there are many other competing opportunities that one could make."

Investors may turn to other energy stocks such as Contact Energy or Trust Power should sellers ask too big a premium for MRP, said Guy Elliffe, who helps manage $1.5 billion at AMP Capital Investors.

Some international investors may be driven by a mandate to invest in renewable energy, stoking demand for MightyRiverPower which produces more than 90 percent of its electricity from renewable sources, said Shane Solly, who helps manage more than $200 million at Mint Asset Management.

"I am not anticipating a huge sale of stock by private investors," said Solly, who participated in the offer. "It will come down to what international investors choose to do."

"Most have come in with less than what they bid for. There's been an element of people knowing that they would have to participate in the secondary market," said Solly who expects to be active in the stock.

International investors may have the largest impact on listing given previous experience with stock offerings in the Fonterra Shareholder’s Fund, News Corp's sale of its stake in Sky Network Television and Fairfax Media Group selling its Trade Me holding, said Rickey Ward at Tyndall Investment Management.

"There will be sufficient allocation to encourage local institutions to support the deal on listing," Ward said. "While we may have not received anywhere near what we would have liked, we have received a sufficient allocation to encourage us to participate."

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Dairy And Travel Still Our Largest Export Earners

New Zealand earned $2.3 billion more from exports than we spent on imports during the year ended June 2015... total exports of goods and services were $67.5 billion, while total imports were $65.1 billion. More>>

ALSO:

Approval: Air New Zealand And Air China Launch New Alliance Route

Air New Zealand and Air China have today launched joint sales for a new daily direct service between Auckland and Beijing after receiving approval from New Zealand Minister of Transport Hon Simon Bridges to form a strategic alliance. More>>

ALSO:

Money Trading: FX Trader Jin Yuan Finance Warned Over Lack Of Monitoring

Jin Yuan Finance, an Auckland-based foreign exchange trader, has been warned over its lack of anti-money laundering processes in place in the first public notification by the Department of Internal Affairs. More>>

ALSO:

Auckland Surge, Possible Peak: House Values Accelerate At Fastest Annual Pace In 8 Years

New Zealand residential property values rose at their fastest annual pace in eight years in August, pushed higher by overflowing demand in Auckland, which is showing signs speculators think it has reached its peak, according to Quotable Value. More>>

ALSO:

Cash Money: Reserve Bank Launches New $5 And $10 Banknotes

The $5 and $10 final banknotes were revealed at an event at the Bank in Wellington, and will start to be released from mid-October 2015. More>>

ALSO:

Truck Sales Booted: Commerce Commission Files Charges Against Mobile Trader

The Commerce Commission has filed charges against a mobile trader, or truck shop operator, claiming he obtained money from customers by deception and never intended to supply them with the goods they paid for. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news