web analytics

Spin-bustin’: new investors scared off MRP

Written By: - Date published: 8:19 am, May 10th, 2013 - 27 comments
Categories: privatisation - Tags:

The Nats’ spin is that ‘mums and dads’ were scared off investing in Mighty River Power by the Green-Labour NZ Power plan to reduce power prices but sophisticated buyers bought in. Look at the evidence: 80,000 of the 113,000 retail investors are new to the stockmarket and they boost stockmarket participation by 20%. Hence there were 400,000 existing Kiwi shareholders, and less than 10% of them bought in.

That tells me that 80,000 suckers were pulled in by the government’s multi-million dollar ad campaign while the vast majority of established shareholders knew well enough to stay away. What, in effect, we saw was a judgement by the market – that a Green-Labour government is coming, it will introduce NZ Power, and that will reduce power prices by taking away the super-profits of Mighty River and the others.

Things to watch in coming days and months:
How much has National underpriced MRP to get a positive story of a bounce on listing? Every cent of rise is nearly $7m in public money that National gave away?
How many ‘mums and dads’ are still there when we get the first annual report figures in October?
How many people will show up to a second or third electricity company float if so few showed up to the best of the bunch?

27 comments on “Spin-bustin’: new investors scared off MRP”

  1. Dv 1

    AND only $25million was withdrawn after the LG announcement.

  2. Good post James. It is scary that so many investors are newbies. I suspect that between Labour’s and the Green’s plans to stop usurious power charges, Tiwai Point’s likely closure and Treaty issues about water the more canny investors decided to hold off.

    Makes you wonder about Meridian and Genesis though. Tiwai Point could turn these entities into marginal businesses at best.

  3. Pete 3

    Also bear in mind the next floats. Few non-institutional investors will invest in all of the power companies and most personal investors with any enthusiasm for the process would have blown their wad on Mighty River. Why invest in competing companies?

    • Rich the other 3.1

      Pete, don’t be silly
      The new investors will cash in on mrp and reinvest in the next offering.
      By the time they are all cashed up and enjoying a better bank balance they will be solid nat voters, brilliant.

      A Win Win situation.

      • framu 3.1.1

        nice of you to confirm its a big stinking con designed to enrich a small elite, rich – well done

      • One Anonymous Knucklehead 3.1.2

        they will be solid nat voters

        All 2.85% of them. Meanwhile, the National Party is bleeding votes from people who don’t want their property sold.

        Own goal, genius.

  4. Lanthanide 4

    “What, in effect, we saw was a judgement by the market – that a Green-Labour government is coming, it will introduce NZ Power, and that will reduce power prices by taking away the super-profits of Mighty River and the others.”

    No, now you’re just making false equivalences, just like National do when they say that everyone who voted for them wants asset sales.

    All we know is that institutional investors didn’t buy in. We don’t know *the* reason why, as you are claiming. Your given reason can also work the opposite way: some investors will think Labour/Greens won’t get into government, and so will have bought more shares because they expect the price to be lower than it otherwise would have been.

    Another reason that I think is important which may have scared off institutional investors is that MRP are projected to pay 107% of next years profits as dividends; eg they’re going to borrow in order to pay dividends. Doesn’t seem like a good move to me.

  5. ianmac 5

    On Morning Report they were saying to expect the share price to rise today from $2.50 to $2.65. As planned.

  6. Adrian 6

    Did the institutions hold off if as Carmel Fisher says the real price will be evident in a months time. What’s the bet that they’re going to pick up shares at a snip then from the newbie muppets?.

    • King Kong 6.1

      These newbie “muppets”, as you call them, at least had the smarts to accumulate enough spare cash to be able to invest in these shares in the first place. A lot more credible than some of the malingerers and beneficiary wasters on here who are giving them shit.

      When you are not clever enough to get a job maybe you should dial back the financial advice.

      • Lanthanide 6.1.1

        Anyone who bought the shares with the intent to re-sell in the short term will have to pay income tax on them.

        Be interesting to see how many of these first-time investors know that.

        • Cant remember my last username 6.1.1.1

          Theoretically yes, but in reality highly highly unlikely

          • Lightly 6.1.1.1.1

            IRD’s said that they will be watching them. wonder if govt has given IRD the deets of retail investors

      • Murray Olsen 6.1.2

        I’ve got a job. I’ve got spare cash. The only financial advice I have for anyone is to not buy stolen goods. My knuckles don’t drag on the ground.

      • Adrian 6.1.3

        I was quoting Carmel Fisher boofhead. She’s not buying for a while, and I’ll take my financial advice from her. Not some Aaron Gilmore wannabe with a third K missing.

    • mikesh 6.2

      I expect the “newbies” will hold for two years in order to obtain the bonus issue.

  7. Rich the other 7

    Happy days,

    Looks like $2.80 for mrp.

    (ps) I didn’t buy any I but enjoy seeing success.
    go the nats.

    • Lanthanide 7.1

      “(ps) I didn’t buy any I but enjoy seeing success.
      go the nats.”

      Rooting for the wrong team, then.

      • framu 7.1.1

        and just to be pedantic

        “go the (insert noun)” – has got to be one of the worst uses of the english language ive seen in a long time.

        I know it really common, but its almost text speak

        • ianmac 7.1.1.1

          How about ive (ivy?) instead of I’ve framu? 🙂

          • mac1 7.1.1.1.1

            ianmac, ‘Quis pedat ipsos pedantes’?

            Seriously though, the comment from Rich the other about success demands a reply as to the nature of success. At the personal level, an investor of $8000 at $2.50 a share gets 3200 shares which if they rise by 30 cents gives an immediate profit of $960.

            At the level of society, half a social asset has been sold for $1.8 billion to give tax breaks to the already rich with the effect of reducing government revenue from MRP returns of, is it, some $200 per annum which means that in nine years the loss of revenue will have equalled the sale price? Who will be affected by the loss of annual revenue but those who still pay taxes or who will lose governmental services and support?

            Not my idea of success.

          • framu 7.1.1.1.2

            ha ha – fair enough 🙂 (you should of seen how i first typed pedantic)

            and lets not mention the missing “‘s” from “it’s”

  8. Financially literate 8

    ‘How much has National underpriced MRP to get a positive story of a bounce on listing? Every cent of rise is nearly $7m in public money that National gave away?’

    Every cent rise increases the government’s equity. Something the left seemingly wishes to decrease at every opportunity. Short-sighted.

    • locus 8.1

      My chook lays 2 eggs a day. You can own half my chook if you pay me 100 eggs. After 200 days i’m losing out.

      But according to your logic, if somebody offers you 120 eggs for your half of the chook, that means my half of the chook is worth 120 eggs. Oh goody i now know i’ll only be losing out after….. 200 days

  9. Financially literate 9

    MRP has been sold down. It always was going to be. Get over it. 120 is better than 100 which again is better than 80. Pity the bed wetters are hell bent on talking Crown equity down for short term political gain.

    • Ross 9.1

      What did Treasury say about the deficit? That’s right, it’s expected to grow by $100 million following the loss of revenue from MRP.

Recent Comments

Recent Posts

  • Budget ignores vital role of quality ECE
    Last night I watched a fascinating programme about the Otago University 45 year study of 1000 New Zealanders. It concluded that there are ways to intervene and support people who are at risk of becoming violent. One of the key… ...
    GreensBy Catherine Delahunty
    10 hours ago
  • More ice for Radio NZ in Budget
    Budget 2016 once again left our only public broadcaster, Radio NZ (RNZ), worse off. After eight years of funding freezes, you have to wonder if RNZ is being iced-out for ideological reasons. I believe public broadcasting is an important cornerstone… ...
    GreensBy Gareth Hughes
    17 hours ago
  • Fisheries inquiry must be widened to include Trident
    The Government must widen its inquiry into the Ministry for Primary Industries to include its awarding of a company owned by Sanford and Moana Pacific Fisheries to monitor commercial fishing vessels, Labour’s Fisheries spokesperson Rino Tirikatene says. The Ministry for… ...
    19 hours ago
  • Government spend up on state house sell off
    The Government has spent $28.9 million and has 129 officials working on its misguided state house sell-off, says Labour’s housing spokesperson Phil Twyford.  “This is a scandalous waste of taxpayers’ money on a policy that won’t deliver a single extra… ...
    2 days ago
  • Housing crisis has huge impact on education
    The National Government’s failure to get on top of the housing crisis is having a major impact on the quality of education a lot of school kids are getting, Labour’s Education spokesperson Chris Hipkins says.  “There are thousands of kids… ...
    2 days ago
  • Minister celebrates while arts organisations face cuts
    Maggie Barry was full of self-congratulations for her small arts announcement in the budget, ignoring the pain that a large number of organisations are facing due to her inaction, says Arts, Culture, Heritage spokesperson Jacinda Ardern.  “The Budget delivered a… ...
    2 days ago
  • Regions miss out again in Joyce’s Koru Lounge Fund
      The regions have missed out yet again with Steven Joyce offering just $10m a year for key regional development projects while trumpeting a bunch of re-heated announcements, says Labour’s Economic Development spokesperson David Clark. “The dairy downturn has put… ...
    3 days ago
  • Children’s Commissioner misses out in Budget
      The Office of the Children’s Commissioner has missed out on a much needed boost in this year’s Budget, meaning they will be forced to continue their reduced monitoring role of CYFs residences, says Labour’s spokesperson for Children Jacinda Ardern. … ...
    3 days ago
  • Communities miss out in Budget
    Budget 2017 has left community and NGO providers feeling exposed about the services they provide to vulnerable families especially in smaller towns and communities, says Labour’s Whānau Ora Spokesperson Nanaia Mahuta. “Approximately $40m will go into Whānau Ora to work… ...
    4 days ago
  • Budget2016: Two Worlds
    Sometimes I feel as if I live in two worlds. The world created by the National Government where everything is great and they’re doing a great job and the world as seen through the eyes of child advocates, community workers,… ...
    GreensBy Jan Logie
    4 days ago
  • Parekura would be proud – MTS gets boost
    The Labour Party is ecstatic that the Māori Party have shown support for one of Labour’s proudest policies, says Labour’s Māori Broadcasting Spokesperson Peeni Henare.  “The Māori Television Service was launched in 2004 by the late Hon Parekura Horomia. ...
    4 days ago
  • Māori housing in state of emergency
    The Government needs to declare a state of emergency for Māori Housing, says Labour’s Māori Development spokesperson and Te Tai Tokerau MP Kelvin Davis. “The extra $3 million a year Māori Housing Network fund will not scratch the surface in… ...
    4 days ago
  • State house sell off in disarray after provider pulls out
     The Government should cancel its planned sell-off of state houses after the second big community housing provider pulled out leaving the process in disarray, says Labour’s Housing spokesperson Phil Twyford.  “It is time for the Government to back away from… ...
    4 days ago
  • Nothing in Budget to help police to solve crime
    The Police Minister has failed to make communities safer with virtually no new money in yesterday’s Budget for police to address the appalling burglary resolution rates, says Labour’s Police spokesperson Stuart Nash.  “It’s a disgrace there’s no money or aspiration… ...
    4 days ago
  • Blog – Budget 2016: What about ordinary working people?
    Ordinary working New Zealanders don’t fare very well from this Budget. Setting aside the spin from the Government, it contains a lot to be concerned about and a fudging of the numbers. Green Party workplace relations spokesperson Denise Roche For… ...
    GreensBy Denise Roche
    4 days ago
  • Real wages go backwards for next two years
    New Zealanders’ real wages will fall for the next two years as the cost of living outpaces forecast pay rises, says Leader of the Opposition Andrew Little. “New Zealanders have been doing it tough for far too long. They expect… ...
    4 days ago
  • The Attack on Public Education – by a thousand cuts
    Budget 2016 is another step towards the free public education system being a memory from the past. The Budget freezes the operations grant for schools and does not sufficiently cover the real increase in numbers of students entering the education system.… ...
    GreensBy Catherine Delahunty
    4 days ago
  • The Attack on Public Education – by a thousand cuts
    Budget 2016 is another step towards the free public education system being a memory from the past. The Budget freezes the operations grant for schools and does not sufficiently cover the real increase in numbers of students entering the education system.… ...
    GreensBy Catherine Delahunty
    4 days ago
  • The give with one hand – take with the other Budget
    The Minister of Health has pumped out media releases to 20 District Health Boards heralding increases in funding for their regions, says Labour’s Health spokesperson Annette King. “But when you add population growth and inflation into the figures you get… ...
    4 days ago
  • Budget offers no hope of fixing housing crisis
    The Budget’s underwhelming housing measures will give New Zealanders no hope that National is capable of fixing the housing crisis, Labour’s Housing spokesperson Phil Twyford says. “There isn’t a scrap of an idea to help desperate young Kiwi families into… ...
    4 days ago
  • How the budget fails new New Zealanders
    Greens co-leader James Shaw was absolutely correct to say the 2016 budget is just papering over the cracks. There’s nothing in this budget to increase wages, address inequal pay for carers or deal with the shocking pay rates and employment… ...
    GreensBy Denise Roche
    4 days ago
  • Parents will pay more as school budgets frozen
    Parents will pay more for their kids’ education as a result of this year’s Budget after the Government froze operational funding for schools, Labour’s Education spokesperson Chris Hipkins says. “This means schools are effectively going backwards. They will need to… ...
    4 days ago
  • Sticking Plaster Budget fails the test
    Bill English’s penultimate Budget fails to tackle the structural challenges facing the economy – a housing crisis, rising unemployment, underfunded health and creaking infrastructure, says Labour’s Finance spokesperson Grant Robertson. “This Budget applies a sticking plaster to a compound fracture.… ...
    5 days ago
  • John Key fails middle New Zealand with no fix for housing crisis, more underfunding of health
    Middle New Zealand has again missed out in this year’s Budget with not a single fix for the housing crisis, and health and education woefully underfunded again, Leader of the Opposition Andrew Little says. “This Budget is just a patchwork… ...
    5 days ago
  • Labour Bill would back Kiwi jobs
    The Government’s $40 billion of buying power would go towards backing Kiwi businesses and jobs under a Labour Member’s Bill which will be debated by Parliament, Leader of the Opposition Andrew Little says. “My Bill – which was pulled from… ...
    5 days ago
  • Julie Anne Genter: My Budget 2016 wish is fairness
    When my parents first visited me in Auckland ten years ago, they remarked on how there were no homeless people on the streets. Coming from Los Angeles, they were used to seeing the impacts of horrendous inequality and a lack… ...
    GreensBy Julie Anne Genter
    5 days ago
  • Steffan Browning: Pesticide reduction and Organic Growth Strategy in Budget 2016
    Pesticide reduction The Budget is an opportunity for the Government to launch a pesticide reduction strategy that multiplies the Environmental Protection Authority’s (EPA) and the Ministry for Primary Industries’ capacity to reassess pesticides and other toxins.  The Agricultural Compounds and… ...
    GreensBy Steffan Browning
    5 days ago
  • Steffan Browning: Pesticide reduction and Organic Growth Strategy in Budget 2016
    Pesticide reduction The Budget is an opportunity for the Government to launch a pesticide reduction strategy that multiplies the Environmental Protection Authority’s (EPA) and the Ministry for Primary Industries’ capacity to reassess pesticides and other toxins.  The Agricultural Compounds and… ...
    GreensBy Steffan Browning
    5 days ago
  • Minister won’t fess up on wrong figures
    The Minister of Health was caught out telling porkies in Parliament today when he was asked about the number of people getting access to mental health and addiction services, says Labour’s Health spokesperson Annette King. ...
    5 days ago
  • Budget 2016 and our LGBTQI communities
    LGBTI people make up about a tenth of our population, and our communities face a unique set of needs and challenges. These challenges are caused or exacerbated by discrimination, invisibility and barriers to appropriate support. We have a long way… ...
    GreensBy Jan Logie
    6 days ago
  • Budget 2016 and our LGBTQI communities
    LGBTI people make up about a tenth of our population, and our communities face a unique set of needs and challenges. These challenges are caused or exacerbated by discrimination, invisibility and barriers to appropriate support. We have a long way… ...
    GreensBy Jan Logie
    6 days ago
  • Scrambled announcement policy on the hoof
    Paula Bennett’s scrambled desperate announcement that she will pay homeless people to move to the regions is just the latest evidence of the disarray this Government’s housing policy is in, Leader of the Opposition Andrew Little says. “This is policy… ...
    6 days ago
  • Police Minister admits resolution rates fall short of expectation
    Police Minister Judith Collins has admitted in Parliament current burglary resolution rates are not meeting the expectations of our communities, says Labour’s Police spokesman Stuart Nash “Out of 284 police stations in New Zealand in 2015, 24 stations recorded zero… ...
    6 days ago
  • Mojo Mathers: A better deal for animals in Budget 2016
    Currently we are failing animals in NZ. On the face of it farmed and domestic animals in this country have strong legal protection from abuse, cruelty and neglect. In reality it seems that only the very worst, most extreme cases… ...
    GreensBy Mojo Mathers
    6 days ago
  • Metiria Turei: What we need from Budget 2016
    Every family deserves a warm decent home.  Everyone believes that. This housing crisis is just the latest consequence of a Government who puts the interests of the few wealthy people above the needs of NZ families.  Families are doing it… ...
    GreensBy Metiria Turei
    6 days ago
  • Dairy exports fall of 11%: Budget action on diversification needed
    Dairy exports have fallen 11 per cent compared to this time last year, a fall of almost $1.5b, showing the Government must take clear action on diversifying the economy in tomorrow’s Budget, says Labour’s Trade and Export Growth spokesperson David… ...
    6 days ago
  • Investors driving families out of homes in South and West Auckland
    Investors cashing in on skyrocketing Auckland house prices are driving families out of homes in South and West Auckland and causing homeownership rates in some of our poorest suburbs to plummet, Labour’s Housing spokesperson Phil Twyford says. “New analysis shows… ...
    6 days ago
  • Budget must deliver on paid parental leave
    Budget 2016 must deliver 26 weeks paid parental leave by April 2018 – anything less will be short-changing families, says Labour MP Sue Moroney. “My Bill which is before Parliament this afternoon has majority support and does just that. I… ...
    6 days ago
  • Key’s “brain fart” on tax cuts news to English
    John Key didn’t tell his own Finance Minister he was about to go on radio and announce he wanted $3b of tax cuts, just days after Bill English ruled them out, says Labour’s Finance spokesperson Grant Robertson. “In Parliament today… ...
    7 days ago
  • What I’m looking for in Budget 2016 – A better start for our tamariki
    Ensuring the best start for our tamariki is a priority for me in everything I do. And so in Budget 2016, my first budget as an MP, I looking for the Government to make a real investment in the wellbeing… ...
    GreensBy Marama Davidson
    7 days ago
  • What I’m looking for in Budget 2016 – A better start for our tamariki
    Ensuring the best start for our tamariki is a priority for me in everything I do. And so in Budget 2016, my first budget as an MP, I looking for the Government to make a real investment in the wellbeing… ...
    GreensBy Marama Davidson
    7 days ago
  • Denise Roche: What I’m looking for in Budget 2016 Pt II
    Aotearoa’s new New Zealanders,  come to our country in vulnerable position: – often away from the culture, communities and families they know, sometimes in neighbourhoods without familiar faces and often encountering barriers to employment. With net migration at 50,000+ a… ...
    GreensBy Denise Roche
    7 days ago
  • Equal Pay and Budget 2016
    The last few years we’ve seen equal pay for women flagged as an undefined risk in the budget. This year we should expect to see this, as well as budgeted money to deliver equal pay to caregivers and funding for,… ...
    GreensBy Jan Logie
    7 days ago
  • Equal Pay and Budget 2016
    The last few years we’ve seen equal pay for women flagged as an undefined risk in the budget. This year we should expect to see this, as well as budgeted money to deliver equal pay to caregivers and funding for,… ...
    GreensBy Jan Logie
    7 days ago
  • A great Budget would
    A great Budget would embrace the challenge of our polluted rivers and move the money away from justifying the status quo water rules into cleaning up waterways. A great Budget would take the Ministry for the Environment freshwater budget and… ...
    GreensBy Catherine Delahunty
    7 days ago
  • Budget building materials policy backfires
    On the eve of this year’s Budget official figures show Nick Smith’s Budget 2014 centrepiece to reduce the cost of building materials has backfired, says Labour’s Housing spokesperson Phil Twyford. “Ministry of Business, Innovation and Employment officials have spent the… ...
    7 days ago
  • Smarter, Better, Cleaner, Stronger
    This Thursday Bill English will deliver his eighth Budget. Will it continue the trend of previous National budgets, making tertiary education less affordable, putting only token funds into innovation, and subsidising polluters? Budgets aren’t what they used to be. Once… ...
    GreensBy Gareth Hughes
    7 days ago
  • Govt must come clean on tax cuts in Budget
    National is making a mockery of the Budget process by dangling the promise of tax cuts but failing to include them in the Budget, says Labour’s Finance spokesperson Grant Robertson. “National’s tax cut promises have turned into a farce. One… ...
    1 week ago
  • Grant Robertson Pre-Budget Speech
    Today I want to talk about success. As we know success can come in many different forms, from the fact you all made it here at such an early hour on a Monday, for which I am very grateful, to… ...
    1 week ago
  • Budget must deliver for middle New Zealand
    The Government must ensure next week’s Budget stops the squeeze on middle New Zealand and delivers shared prosperity for all New Zealanders, Leader of the Opposition Andrew Little says. The call follows new research commissioned by Labour that shows working… ...
    1 week ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere