Investors shrugged off any concern about the political future
as large volumes of Meridian shares were traded after the
country's largest energy company listed on the NZX yesterday.
By 5pm, more than 228 million shares had been traded with a
day high of $1.09 and day low of $1.05. The average trade was
190,000 shares, but some parcels were as high as 3.5 million,
pushing the NZX to one of its highest recent trading days.
Brokers said there were some large trades made through the
day but it was unclear whether institutions were topping up
their stakes or whether large private investors were seeking
more of a stake.
It would take a week before the shares settled into a steady
trading pattern, brokers said.
Meridian Energy's instalment receipts debuted at $1.08, an 8%
premium, after tepid demand in the initial public offering
resulted in the stock being sold at the bottom end of its
indicative range and with a smaller-than-expected pool of
The shares were offered in instalment receipts to sweeten the
offer, with $1 upfront and the promise of full entitlement to
dividends, and the remaining 50c in May 2015.
The float will raise $1.88 billion after the two instalment
payment programme completes in 2015. They recently traded at
$1.07 with about 80 million shares changing hands in the
first 30 minutes.
''Given the uncertainty that still surrounds the electricity
sector, the price is probably a fair call,'' Rickey Ward,
head of equities at Tyndall Investment Management, which
bought shares in the IPO, said.
''The changes that could occur under a Labour-Greens
proposal, as well as Tiwai - the price has got some of those
elements in it.''
Meridian has 2.56 billion shares on issue, of which 51% are
controlled by the Government, leaving around 1.26 billion
shares to be publicly traded.
The Government attracted about 62,000 New Zealanders to the
sell-down of 49% of Meridian at $1.50 a share, the bottom of
the indicative range of $1.50 to $1.80.
Demand for the shares was hurt by the risk posed by the
Labour Greens policy to install a central buyer of power,
effectively capping prices that could be charged for
The Green Party continued its campaign against asset sales
yesterday, saying Treasury warned the Government it should
not attempt to sell assets in quick succession because there
would be insufficient demand and the revenue to the Crown
would be reduced.
The uncertainty about the sale of power to the Tiwai Point
aluminum smelter disappeared close to the listing as a new
contract was negotiated with smelter owner Rio Tinto.
Also, if the smelter did close, analysts said the electricity
could be sold into the national grid at a higher price than
it was being sold to the smelter.