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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Judicial Review: China Steel Tarrif Rethink Ordered

On 5 July 2017 the Minister determined not to impose duties on Chinese galvanised steel coil imports. NZ Steel applied for judicial review of the Minister’s decision. More>>

Debt: NZ Banks Accelerate Lending In June Quarter

New Zealand's nine major lenders boosted lending at the fastest quarterly pace in almost two years as fears over bad debts subsided. More>>


Balance Of Trade: Annual Current Account Deficit Widens To $9.5 Billion

New Zealand’s current account deficit for the year ended June 2018 widened to $9.5 billion, 3.3 percent of GDP, Stats NZ said today. More>>


Talking Up The Economy: NZD Gains On PM's Mistaken GDP Comment

Her comments were downplayed by her chief press secretary who said she was referring the government's June year financial statements and had "made a mistake." More>>