So who is going to buy some shares in Mighty River Power?

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Forums › Finance and wealth management › So who is going to buy some shares in Mighty River Power?

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#775135 5-Mar-2013 17:55

networkn:
Davy: Yes but it's not about the government making money - it's about the financiaql community making money (and lots of it) at the expense on NZers from whom these shares are being taken.

Boy oh boy one in every thread!

One what ? someone who can think further ahead than their own pockets ?

Byrned

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#775138 5-Mar-2013 18:08

mrphil:
grant_k:
mrphil: I'm thinking to buy some as a investment but this is all new to me.

If purchased do I need some type of share broker or do I just buy and sell via the mightyrivershares.govt.nz website?

Plus how do you pay for them? Is it linked to your bank account and they will have the rights to take the funds out themselfs?

You don't need to have a share broker unless you want to. Both options are catered for via the online form.

When I filled in the name of my broker (ASB Securities) it asked me for my client number, which I guess is another way they can verify your credentials, and maybe save some extra paperwork later.

To trade the shares after issue, you will need to use a broker. Several of the banks offer this service, and so do some third parties, but after I very nearly lost some money when Access Brokerage went under, I decided to only use a registered bank for share trading from that time onwards. I have been very pleased with the speed and ease of use offered by the ASB Securities website.

I expect that you will be able to pay for the shares either by cheque, or by internet banking into the organising broker's trust account, or possibly Direct Debit via Computershare. Those are the ways most of the recent share offers have been paid for.

Thanks will look into asb securities

Note that from the info provided so far its only those that register through the mightrivershares site will be given preference to shares. And it also sounds like its only if you register through there that you will be eligible for the loyalty bonus? Hopefully someone can confirm this. Those through instituions may see their request scaled back and its only investments of $1-2k which are guaranteed. With the interest seen so far I would expect those that have registered through mightrivershares will at most got 25% less than what they register for.

Saying that, those that register through instituions may get a better price...

nathan

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#775154 5-Mar-2013 18:15

Byrned:
mrphil:
grant_k:
mrphil: I'm thinking to buy some as a investment but this is all new to me.

If purchased do I need some type of share broker or do I just buy and sell via the mightyrivershares.govt.nz website?

Plus how do you pay for them? Is it linked to your bank account and they will have the rights to take the funds out themselfs?

You don't need to have a share broker unless you want to. Both options are catered for via the online form.

When I filled in the name of my broker (ASB Securities) it asked me for my client number, which I guess is another way they can verify your credentials, and maybe save some extra paperwork later.

To trade the shares after issue, you will need to use a broker. Several of the banks offer this service, and so do some third parties, but after I very nearly lost some money when Access Brokerage went under, I decided to only use a registered bank for share trading from that time onwards. I have been very pleased with the speed and ease of use offered by the ASB Securities website.

I expect that you will be able to pay for the shares either by cheque, or by internet banking into the organising broker's trust account, or possibly Direct Debit via Computershare. Those are the ways most of the recent share offers have been paid for.

Thanks will look into asb securities

Note that from the info provided so far its only those that register through the mightrivershares site will be given preference to shares. And it also sounds like its only if you register through there that you will be eligible for the loyalty bonus? Hopefully someone can confirm this. Those through instituions may see their request scaled back and its only investments of $1-2k which are guaranteed. With the interest seen so far I would expect those that have registered through mightrivershares will at most got 25% less than what they register for.

Saying that, those that register through instituions may get a better price...

the offer price will be the offer price, it won't be different for those individual members of the public who purchase via a sharebroker.

institutions themselves may get a cheaper price

the loyalty bonus is just speculation at this stage, I believe it will have nothing to do with how you purchase, just if you are a NZ citizen who holds them for X period of time

Byrned

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Ultimate Geek
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#775157 5-Mar-2013 18:23

jonherries:
Byrned:
jonherries: I am worried about the incentives in this:

Price it too high and the price goes down on listing day, bad PR all round.
Price it too low and the government shafts themselves when they are trying to make money.

It depends on how greedy the government is, I would guess very. I wonder if the bonus would offset the pricing issue?

Jon

If you're serious about investing, it isn't about what happens on listing day, but where you see the company going in the long term, how that will effect the long term share price, and most importantly, what the dividend return is.

But in answer, yes, I plan to buy what I can get my hands on. The offer of the incentive and the likely dividends are what's attracting me.

Interesting. From a long term perspective:

Are you concerned by the lack of growth in demand for power?
Or the thought that RioTinto may close Tiwai?

The reason I mentioned the list price on float day was whether it would be better to wait until then to buy, if the price goes down you get more investment for your money?

Jon

i don't see the need for power in the long term diminishing. What's happened in the last few years that has flattened out the demand for power. A rescission. Manufacturing stalls. Demand for power goes down. Now we haven't actually seen demand for power drop, only stagnate. One would have to predict that when economics allow for growth again, we will see increases in requirements. And anyway, with energy generation, demand increases, price goes up. Demand decreases. Price goes up. Through all the cycles we've had since deregulation name one time the cost of electricity has gone down.

In regards to Tiwai Point and the Manapour power station, thats a Meridian problem, not a Mighty River problem. Yes it could mean extra supply to the market, but the cost of getting that power to the rest of the grid and the upgrades that would require to the grid will most likely balance that equation out. Worst case would be an oversupply and price decrease, but I would only see this as being a short term over supply. Growth is always happening.

The real interest for me comes from the intellectual property of the company. New Zealand really is a specialist in renewable energy generation. With the focus on this around the world and with the shackles of being an SOE being relaxed it opens up a lot of possibilities for joint ventures around the world. Just so long as they don't do an AirNZ/Ansett which then requires a bailout!

Anyway, thats my point of view and the reasoning on why I see it as a sensible LONG TERM investment. Short term its not gonna do much at all. Actually because of this I also believe we'll see a number of the mum and dad investors jump out of this within a few years.

DarthKermit

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#775159 5-Mar-2013 18:28

Nope, but only because I've never had shares in any company. I've never decided to dabble in the sharemarket.

Whatifthespacekeyhadneverbeeninvented?

networkn

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#775164 5-Mar-2013 18:33

/me wonders what the likely return will be....

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pctek

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#775169 5-Mar-2013 18:50

No
1) haven't got any money.
2)Too much like buying your TV back from the thief down the pub.
3)Would choose a better company to invest in....something new and innovative.

tdgeek

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#775189 5-Mar-2013 19:17

In todays, and NZ's regulated economy, I'd be concerned that the success is too hard for an electricity provider to have, and avoid some form of Govt regulation/control. Making too much money, or not investing in infrastructure enough. Or not innovating enough with renewables.

networkn

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#775195 5-Mar-2013 19:39

pctek: No
1) haven't got any money.
2)Too much like buying your TV back from the thief down the pub.

Perhaps if you tried to understand why comment two wasn't correct you might find comment one resolved itself ?

k14

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#775203 5-Mar-2013 19:50

Byrned: In regards to Tiwai Point and the Manapour power station, thats a Meridian problem, not a Mighty River problem. Yes it could mean extra supply to the market, but the cost of getting that power to the rest of the grid and the upgrades that would require to the grid will most likely balance that equation out. Worst case would be an oversupply and price decrease, but I would only see this as being a short term over supply. Growth is always happening.

Lol, wow that is so wrong. If Tiwai shuts down then every power company in NZ will suffer. Research how the spot market works and you will know why. The wholesale market prices will hit the floor. All thermal plant will be run at a loss, if not just shut down collecting dust (MRP has one in Auckland) and the hydro/geothermal will return a lot lower revenue. That is fine if you are immune from the wholesale market (if you have the same amount of customers as generation) but no one has a perfect 1:1 match. Out of the big 4 Meridian will probably suffer the most but Genesis, Contact and Mighty River will all be in the crap too.

Also, go look at the last 3 years demand. It has actually decreased slightly. Yes recession, chch earthquake has contributed but that is not the whole story. The latest theory is that currently electricity prices in NZ are hovering around the threshold of being classed as a luxury. People are trying to cut back and shorter showers, energy efficient lightbulbs etc are easy ways to cut the $$. There are plenty of other ways to reduce demand too, adding in some PV or solar hot water all combines to a fair amount of uncertainty in the next 5-10 years.

FierceGuppy

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#775228 5-Mar-2013 20:14

No, I would never buy shares in Mighty River Power nor ANY company while its future viability is tied up in party politics. I'm thinking Mighty River Power shares will end up like Telecom's shares.

Tony.

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jonherries

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#775229 5-Mar-2013 20:14

mattwnz: The website didn't work well in IE10, just an infinte loop on the second page.

Just to pull up the OP on the following statements

>> I understand people don't want assets sold and I agree with this sentiment, but if they are going to be sold without our consent, will you buy them? <<

Actually the national government was voted in based on these asset sales, so they have a full mandate to sell 49% of them off. 51% will still be owned by the government so NZers still have a majority ownership of them. This is unlike the asset sales of the 80's and 90's which sold 100% of them.

>> It is an interesting conundrum. I don't want to support the assets sales, but think that if I don't buy some then they are more likely to go to overseas buyer<<

As NZers have first right to these shares, selling them could still mean that 100% of these comapnies are 100% NZ owned. Also they are being used for kiwisaver to invest in. IT is then up to the individual investors if they want to sell them overseas, but there are rules regarding how much overseas companies can own anyway. So they will remain NZ majority owned anyway. Kiwisaver had a limited number of things to invest in in NZ, so this could be very good for kiwisaver, depending on how well the shares do.

My concern though is that apparently NZ currently has an oversupply of electricity, so not sure how well the shares will do.

I would argue that the national government was voted in despite the asset sale agenda. Over 80% of the population is against them. There aren't that many issues which get that much support. However as I also say this discussion is not what the thread is for, so thanks for your comments, but please no more on this.

I do agree that the long term value of power companies is shaky, and this is my concern in buying them. As mentioned above, combinations of uncertainty around Tiwai, efficiency growth in consumption, and a better awareness of electricity use has combined to knock any growth out of the market.

I also agree with the thought that electricity may now be at a point of being priced as a luxury.

Jon

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#775289 5-Mar-2013 21:20

jonherries:
However as I also say this discussion is not what the thread is for, so thanks for your comments, but please no more on this.
Jon

OP : I agree with what you are saying but you started a topic, Do you just want straight Yes/No answers yet no comments as to why ? The reasoning behind a vote is often more valuable than statistical analysis. You gave a clear example as to why above

bfginger

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#775809 6-Mar-2013 18:01

FierceGuppy: No, I would never buy shares in Mighty River Power nor ANY company while its future viability is tied up in party politics. I'm thinking Mighty River Power shares will end up like Telecom's shares.

Tony.

Shutting down of metal smelting plants, further decline in manufacturing, mandatory solar water heating, mandatory insulation for rentals or a decline in NZ's extremely high immigration rate, would significantly reduce electricity demand and all may come to pass over the next 5 to 10 years.

ajw

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#775825 6-Mar-2013 19:03

bfginger:
FierceGuppy: No, I would never buy shares in Mighty River Power nor ANY company while its future viability is tied up in party politics. I'm thinking Mighty River Power shares will end up like Telecom's shares.

Tony.

Shutting down of metal smelting plants, further decline in manufacturing, mandatory solar water heating, mandatory insulation for rentals or a decline in NZ's extremely high immigration rate, would significantly reduce electricity demand and all may come to pass over the next 5 to 10 years.

And also the large amount of people that are leaving the country.

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