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

 

Budget Confirms Meridian the Next to Float

Budget Confirms Meridian the Next to Float Under Mixed Ownership Model Programme 

Healthy domestic capital markets key to economic growth


The continuation of the mixed ownership model (MoM) programme will stimulate New Zealand’s capital markets and contribute to economic growth, according to Deloitte Corporate Finance Partner Andrew Hirst.

Today’s announcement that Meridian Energy will be the next initial public offering to proceed under the Government’s MoM programme, following on from the listing of Mighty River Power last week and despite a few hurdles in the process, is welcome news to domestic capital markets.

The Government has pointed to a number of benefits from the MoM, including greater efficiency and transparency on behalf of the SOEs being sold down, and raising $5-7 billion to pay down debt while freeing up capital for reinvestment in infrastructure.  This still appears to be on track after raising $1.7 billion from the Mighty River Power float and despite Solid Energy likely to drop out of the mix.

“But arguably the most important outcome from pursuing the programme is the much needed boost it will provide to our domestic capital markets, with total market capitalisation of the NZX expected to increase between 10 and 20 percent post the MoM programme,” says Mr Hirst.

Capital markets are a key determinant of New Zealand’s economic performance.  A healthy domestic capital market will provide another alternative investment avenue for savings other than residential housing and create less reliance on term deposits, bonds and international equities for both domestic private investors as well as the domestic fund managers, Kiwisaver, the NZ Super Fund, etc.

“The reality is that without completing the MoM programme through the partial sell-down of these SOEs, the New Zealand equity capital markets will continue to struggle for relevance and critical mass, making much needed economic growth harder to achieve,” concludes Mr Hirst.

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

57 Million Users' Data: Uber Breach "Utterly Preventatable"

Cybersecurity leader Centrify says the Uber data breach of 57 million customer and driver records - which the ride-hailing company hid for more than a year - was “utterly preventable”. More>>

Scoop 3.0: How You Can Help Scoop’s Evolution

We have big plans for 2018 as we look to expand our public interest journalism coverage, upgrade our publishing infrastructure and offer even more valuable business tools to commercial users of Scoop. More>>

Having A Cow? Dairy Product Prices Slide For Fourth Straight Auction

Dairy product prices fell at the Global Dairy Trade auction, retreating for the fourth straight auction amid signs of increased production... Whole milk powder fell 2.7 percent to US$2,778 a tonne. More>>

ALSO:

Statistics: Butter At Record $5.67/Block; High Vegetable Prices

Rising dairy prices have pushed food prices up 2.7 percent in the year to October 2017, Stats NZ said today. This followed a 3.0 percent increase in the year to September 2017. More>>

ALSO:

Science: New Research Finds Herbicides Cause Antibiotic Resistance

New University of Canterbury research confirms that the active ingredients of the commonly used herbicides, RoundUp, Kamba and 2,4-D (glyphosate, dicamba and 2,4-D, respectively), each alone cause antibiotic resistance at concentrations well below label application rates. More>>

ALSO:

CO2 And Water: Fonterra (And Dairy NZ)'s Environment Plans

Federated Farmers support Fonterra’s bold push to get to zero emissions of CO2 on the manufacturing side of the Co-operative, both in New Zealand and across its global network. More>>

ALSO: