Farmers are generally pretty shrewd people. And down in North Otago, Ele from Homepaddock and her farmer certainly fit that bill; she blogged this yesterday:
Financial advisor Martin Hawes thinks shares in Mighty River Power, which is the first state-owned energy company to be partially floated, should be a good buy.
In an email to investors he writes:
Quite a few people are saving their pennies at the moment knowing that Mighty River Power is coming up for partial sale soon. The word is that Government is very keen for this to be a success and although the shares will not be given away cheap (neither they should!), they should represent good buying.I have heard from various people that the price will be at a level that will give a dividend yield of 6% and some have even said 7%. Given where interest rates are at the moment that would represent fairly good value. The company is not without risk (what is?) but a company that provides green, renewable energy should be in demand. It will depend on price but you should be ready to buy some shares …A dividend yield of around 6%, would beat money in the bank at current rates and would be a far safer investment than finance companies.
We have never owned share on our own account, apart from a small parcel of Powerco shares which were given to us as a customer many years ago, and sold off straight away. The Fund Managers of our Kiwisaver fund invest on our behalf; just where they invest, we have no idea, but they are one of the better performing funds, so we're happy.
But we are certainly going to be in the queue of Mum and Dad investors when 49% of Mighty River Power is floated later in the year. We don't have a lot of spare cash; most of it has gone into our businesses, but we see New Zealand's State Owned Enterprises as an excellent, secure long-term investment, with the emphasis on the long term.
3 comments:
When you say 'we don't have a lot of spare cash?' how much do you regard as not a lot spare?
It's a sad reflection on Kiwi business nous when the majority of the NZX top companies have their origins in the public sector and investors such as yourself have to rely on the taxpayer to create wealth.
They are an excellent investment, solid as a rock and will keep returning dividends. Also, at the moment, everyone in the country owns a share in them. If the asset sales go ahead, it will be those wealthy enough to invest who will benefit. Does that really seem fair to you?
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