Thursday, May 9, 2013

First time investors out in force

Mighty River Power shares will be listed on the NZSE tomorrow. The initial share price will be $2.50 per share. The Government's media release reports:

113,000 New Zealanders will become shareholders in Mighty River Power following a successful share offer, Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall say.
The final price will be $2.50 per share.
Of the shares issued, 86.5 per cent will be New Zealand owned: 26.9 per cent by New Zealand retail investors, 8.6 per cent by New Zealand institutions and with the Crown retaining a majority 51 per cent shareholding. That leaves 13.5 per cent for overseas institutions.
“This is an outstanding result and fulfils our commitment to ensuring at least 85-90 per cent New Zealand ownership of the company,” Mr English says.
“The share offer will raise $1.7 billion, which is a very good return for New Zealand taxpayers. Those proceeds will go into the Future Investment Fund, allowing the Government to control debt while continuing to invest in public assets. More details will be announced in next week’s Budget.
"The Government has achieved all of its objectives for the Mighty River Power share offer, so the company will list on Friday.
“Given the strong response to the share offer, and the price we have set, Mighty River Power will have a market capitalisation of $3.5 billion.
“And with over 110,000 New Zealand shareholders, it will have the largest share register – by some margin – of any New Zealand company on the exchange.”

Whilst the Government would doubtless have hoped to raise more than $1.7b from the MRP sale, the scaremongering by Labour and the Greens has obviously taken a toll. It was galling last night to see several Green MP's including the co-leaders gloating at having forced the share price down and having scared potential investors away. Who do they think they are? And do they actually care that they are damaging the New Zealand economy?

The NZ Power announcement was carefully timed to damage the MRP share float. That over 100,000 people, 68% of whom are new to investing in the stock market have like us, put their money where their mouth is shows that not everyone was scared off by the cynical political game being played by David Shearer and likely as not engineered by Russel Norman.

Bring on the sale of Meridian Energy; we'd like to get a small piece of that action as well.


Anonymous said...

The Greens/Labour stance on this is despicable. I bought in, and I am thrilled.


Keeping Stock said...

I could not agree more strongly Cadwallader

Public Watchdog said...

errr…… of the 440,000 who purportedly registered an interest in the Mighty River Power share offer – how many Dumb and Mad investors actually put up money to buy shares? 110,000?

Penny Bright

A Spokesperson for the Switch Off Mercury Energy group
‘Anti-privatisation / anti-corruption’ campaigner

2013 Auckland Mayoral candidate

Helen Clarky said...

But of the 440,000 individual Kiwis who pre-registered their interest just 113,000 ended up buying shares.

That is well below the 220,000 who bought shares in Contact Energy when it floated in 1999.

Only 1/4 of those who registered interest bought in, even the “dodgy” referendum had 3/4 valid signatures.

Keeping Stock said...

@ Public Watchdog - I am leaving your comment up. Voters in Auckland have a right to know the way that one of their mayoral candidates abuses ordinary people who do things that she does not approve of.

However that's it. You are now banned sine die, and not being unfamiliar with legal matters yourself, you will understand that. Any further attempts to pollute this blog will be deleted.

Quintin Hogg said...

Looking forward to confirmation of the shares my wife and I purchased.

When the next offer comes up we will be in for that as well.

Good call on Penny I2. I am a bit over her hypocrasy.

Nookin said...


You might also point out to Penny that the corporates many of who bought in and who she despises, will include the likes of ACC, Insurance Companies, unit trusts, Superannuation funds etc -- all of whom represent mum and dad investors - even Penny herself - and that she might like to pull her head out of her little cocoon of bigotry and look what happens in the real world.

Keeping Stock said...

Quite so QH; Penny may think that describing professionals such as Mrs Hogg and yourself as "Dumb and Mad" is an insult to the intelligence of the very people who keep the country moving. I doubt that she can see that though.

Keeping Stock said...

@ Nookin - I don't need to point that out to Penny; you have done that most eloquently!

PM of NZ said...

As for the high percentage of first time investors (68%) - I say bollocks to that figure. They'll eventually marry up my CSN which I couldn't be bothered to find by trawling through last years accounts when I applied for our MRP shares.

Also bollocks to the left reading heaps into the low conversion from initial pre-registrations. If other punters are maybe like us, we pre-registered multiple valid entities to keep the options open for each entity. We finally bought in the name of only one entity due to personal financial considerations on the day. The end outcome is that both a "Mum and Dad' investor still own MRP shares, albeit under one entity.

Current and future Labour/Green sabotage is not considered to be any risk. However, we do welcome their unintended consequence of the sizable discount.

Anonymous said...

The upside of the nasty Labour and Green's sabotage of the MRP share float is that I have got my shares at a lower price than anticipated.

Campbell O'Donald said...

Abuse directed at anyone opposed to what you’re wanting to do. Repeated mis-representations of what you said, and did. Not to mention the flat denials that there is a problem, when the evidence happens to contradict your version of events. No, I’m not talking about Aaron Gilmore….but about Bill English, John Key etc over the Mighty River share float. Gilmore is no position to point this out, but his sins pale into insignificance when stacked against the government’s asset sales experiment.

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