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

 

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

NASA, NOAA: Find 2014 Warmest Year In Modern Record

Since 1880, Earth’s average surface temperature has warmed by about 1.4 degrees Fahrenheit (0.8 degrees Celsius), a trend that is largely driven by the increase in carbon dioxide and other human emissions into the planet’s atmosphere. The majority of that warming has occurred in the past three decades. More>>

ALSO:

Scoop Business: New Zealand’s Reserve Bank Named Central Bank Of The Year

The Reserve Bank of New Zealand’s efforts to stifle house price inflation by using new policy tools has seen the institution named Central Bank of the year by Central Banking Publications, a publisher specialising in global central banking practice. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news