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

 

Investors should wait until after Z Energy IPO: Morningstar

Investors should wait until after Z Energy float to buy shares at a lower price, Morningstar says

By Tina Morrison

Aug. 14 (BusinessDesk) – Investors would be better to wait until after the Z Energy float to buy shares in the petrol station chain as volatility in the sector means the price is likely to slip in the future, according to research house Morningstar.

Z Energy, owned by infrastructure investor Infratil and the New Zealand Superannuation Fund, will list on the New Zealand stock exchange on Monday, with the issue price via a book build expected to be between $3.25 and $3.75 a share. That is higher than the $3 fair value calculated by Morningstar senior resource analyst Mark Taylor.

“Volatility in the sector, often driven by the swings in fortune of large and irregular shipments of crude and refined products required, means there is a good chance of a better entry price at some time in the future,” Morningstar’s Taylor said in a research note. “Don’t subscribe to the share offer, better entry opportunities may present later.”

The bookbuild to set the share price is scheduled to start tomorrow. The offer is made up of a retail offer to broking firms and staff and an institutional offer. There won’t be a public pool.

Z Energy’s listing allows Infratil and the NZ Super Fund to realise a portion of their investment in the assets they bought from Shell three years ago. The investors, who currently each own a half stake in Z Energy, will retain a combined 40 percent to 50 percent in the listed company.

“Z has many favourable attributes that will make it an attractive investment at the right price,” said Morningstar’s Taylor. “But at the end of the day, this is a risk/reward game, and the vendors are likely to be taking their rewards for risk, and then some.”

Taylor said his fair value estimate for the shares suggests a high fiscal 2014 dividend yield of 7.3 percent, reflecting relatively benign economic conditions and an unsustainable 84 percent payout ratio.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 



The Download Weekly: Vodafone FibreX back in court

Vodafone and the Commerce Commission head back to court over FibreX in a week the TCF issues broadband marketing codes that should avoid similar problems in the future... More>>


NIWA: Tonga Eruption Discoveries Defy Expectations
New findings from the record-breaking Tongan volcanic eruption are “surprising and unexpected”, say scientists from New Zealand’s National Institute for Water and Atmospheric Research (NIWA)... More>>


Commerce Commission: Appeals Record $2.25m Fine In Vodafone FibreX Case

The Commerce Commission has filed an appeal in the High Court against a record $2.25 million fine imposed on Vodafone NZ Limited (Vodafone) for its offending under the Fair Trading Act during its FibreX advertising campaign. While the sentence imposed in the Auckland District Court on April 14 was the largest-ever fine under the Fair Trading Act, the Commission will argue that it is manifestly inadequate... More>>

Stats: Quiet Start For Retail In 2022
The volume of retail sales was relatively unchanged in the March 2022 quarter, following a strong increase in the December 2021 quarter, Stats NZ said today... More>>



Finder: RBNZ Survey: 64% Of Experts Say Rising Inflation Will Push More Kiwis Into Debt

Soaring inflation and cost of living pressures will see many households pushed to the financial limit, according to experts... More>>



Barfoot & Thompson: Rents Up By Around 3% In Most Areas

The average weekly rent paid for homes in most areas of Auckland has risen by around 3 percent year-on-year. The figures for end March from more than 16,000 properties... More>>