Written By: - Date published: 9:58 am, April 10th, 2013 - 90 comments
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Labour is breaking some good stories lately. Here’s one that might interest all you Mum and Dad investors out there in Mum and Dad Investorland:
Incentive to sell MRP shares offshore
The Government’s three major brokers will get double the commission for selling Mighty River Power shares to overseas investment companies rather than New Zealand institutions, Labour state-owned enterprises spokesman Clayton Cosgrove says.
The Mighty River Power share offer document released last Friday showed the joint lead managers, Goldman Sachs, Macquarie and First NZ Capital, will get 0.4 per cent commission for selling shares to Kiwi institutional investors and 0.8 per cent for share sales to their overseas counterparts.
Prime Minister John Key has assured New Zealanders that 70 per cent of Mighty River Power shares will remain in Kiwi hands.
“With the massive risks surrounding the sale becoming apparent with Tiwai Point, the Government is worried that Kiwis will run scared,” Cosgrove said.
“National’s sole concern is getting a good price for the sale. That’s why they’re encouraging brokers to sell more shares overseas to keep the price up. That puts more shares in foreign hands.”
From my point of view the higher the price (income to government) the better, but I’m not sure Mum and Dad investors will be thrilled. As for the built in inventive to send ownership offshore, that just contributes to our underlying long term economic problems. It is a stupid shortsighted footnote to the stupid shortsighted policy that is asset sales.