Friday, May 10, 2013

$2.73

Mighty River Power shares are now being traded on the New Zealand Stock Exchange, and those who bought shares at $2.50 per share have had an immediate piece of good news; the Herald reports:

Shares in Mighty River Power have started trading this afternoon on the NZX at $2.73 each - a 23c or 9.2 per cent premium on the listing price.
Market expectations were for the stock to list at a premium because of the extent of unsatisfied demand from institutions.
Financial market sources said the Government was keen to see Mighty River shares trade at a premium to their issue price because a positive performance would help pave the way for the partial privatisations of the state's other generator-retailers - Meridian and Genesis.
Mighty River's issue price was set slightly below the mid-point of an indicative $2.35 to $2.80 range set by the Government.
Controversy surrounding plans by the Labour Party and the Greens' plan to introduce a "single buyer" power purchasing model - should they form a government - meant final pricing expectations had to be bumped down to the lower end of the indicative range.

There's no denying that some potential investors were scared of by Labour and the Greens NZ Power policy release. And that, of course was the intent. Act Party president and former MP John Boscawen pulled no punches with this tweet this morning:


Boscawen is dead right, and the gloating especially of Green co-leader Russel Norman has been appalling. Voters need to ask themselves just what Russel Norman's motives were over this whole issue.

However those investors who weren't scared off by the Labour/Green threats of economic sabotage will be pleased to see that their investment is already worth 9% more than when the price was announced on Tuesday night. Couple that with the lower-than-expected share price meaning investors got more bang for their bucks, and those people willing to put their money where their mouths were and invest in New Zealand's future (ourselves included) are being rewarded for their aspiration.

Bring on the next float. Having spent more than we originally intended in MRP shares as a gesture of defiance to David and Russel, our investment will be at the lower end of the scale. But we believe in New Zealand, and we believe in getting ahead. Investing directly in New Zealand's future via the Future Investment Fund is one way that we can achieve that.

5 comments:

bsprout said...

Righteous indignation ignores the reality:

-Power prices have increased well above the CPI for many years and most households are spending over $300 more for their electricity since 2008.

-Current electricity charges are worked out at the highest cost of production not the cheapest and electricity companies are making large profits while demand has flatlined.

-The Government's tax cuts for the wealth is costing the country an average of $2 billion a year (the predicted income from the increase in GST didn't occur to make it cost neutral).

-The Government decides to sell off 49% of our power companies to generate extra cash and cover a shortfall in income.

-The referendum petition collected almost 400,000 signatures but 25% were found to be invalid.

-Labour and the Greens announced a plan that would make the purchase of electricity based on the cheapest cost of production to lower household costs by up to $300. To make the announcement before the shares were to be sold is fairer on those buying shares in MRP then making it after.

-There were over 400,000 indications of interest for buying shares but only 25% of this number follow through.

-The Government is planning to sell 49% of another power company almost immediately after the first even though Treasury has advised against it. Having too many shares on the market over a short timespan will just devalue the shares and lower the income generated.

bsprout said...

Should read "wealthy" in fourth sentence above.

M&D 2% said...

"Bring on the next float (even though Treasury warns it's too early)"

Greed has gone to your head, Keeping Stock.

Whafe said...

Very pleasing indeed to see that the Labour + Greens + Pinkos are going to pay the price for their utter stupidity, of which has cost the NZ economy loads of money. Along with the fact that it has lifted the foreign investment in NZ...

This policy announcement by the left is one of the craziest things I have seen in my time on the planet

jabba said...

"National’s under-pricing of the Mighty River Power share float has cost the public millions, as retail investors sell up and the company slips further into overseas ownership, Green Party Co-leader Dr Russel Norman said today"
This on Scoop by Rus Norman.
WTF?