Interesting news yesterday:
Mighty River’s ‘mum and dad’ investors included companies
The 113,000 so called “mum and dad” investors who bought Mighty River shares earlier this month included companies, trusts and investment institutions, Treasury has confirmed. …
Treasury also confirmed that all investors who bought shares in the General Offer including trusts, companies and investment institutions were eligible for the loyalty bonus share scheme.
So “Mum & Dad” turn out to be Freddie Mac and Fannie Mae – what a twist. And another hole shot in the Nats’ rationalisations about privatisation. In fact, the wheels are rapidly falling off the whole endeavour.
The uptake of Mighty River Power shares was much less than expected.
Mighty River Power shares were down to $2.36 last night, 14c down from the offer price of $2.50, and falling.
In this context you’d be a mug to invest in the Meridian sell off. The Nats (who know there’s decent odds that they won’t be in power after the next election) have tried to do too much too soon. Treasury advised against it, but the Nats ignored them. But by now even The Herald can see the folly, and National has had to bow to the inevitable:
Meridian could be sold in chunks – Key
The Government has hinted at selling 49 percent of Meridian Energy in two or three separate parts, in a bid to keep New Zealand ownership at 85 percent.
The Greens spell it out:
Govt admits asset sales program in deep trouble
National has admitted that its asset sales programme is a failure with its decision to consider selling Meridian Energy in blocks, Green Party Co-leader Dr Russel Norman said today.
Media reports suggest Meridian’s 49% shareholding may be sold down in blocks by the National Government.
“As shares in Mighty River Power hit a new low, the Key Government knows it cannot sell 49% of Meridian Energy in one hit in the current climate,” Dr Norman said today
“Unfortunately, rather than biting the bullet and calling a complete halt to its asset sales program it is pushing ahead with a foolish plan to sell Meridian Energy in chunks.
“The Mighty River Power sale was a mighty flop and the Key Government knows that pushing ahead with another sale will result in even fewer shares going to ‘mum and dad investors’.
“Despite spending millions on advertising the truth is that 98 percent of New Zealanders bought no shares in Mighty River Power at all. …
“It is time for the Key Government to listen to the concerns of commentators, the business community and ordinary New Zealanders and cancel its economically disastrous asset sales program.”
What a mess.