Share allocations in Genesis Energy, the operator of the
Tekapo canal, have been reduced because of demand.
Severe scaling of Genesis Energy share allocations is
likely to push the share price higher when the last of the
Government's energy company sell-downs lists on the NZX at 1pm
Craigs Investment Partners broker Peter McIntyre said there
was ''unprecedented demand'' for shares in the company.
Like Mighty River Power and Meridian Energy, the Government
would retain a 51% stake in the company.
''People will now have their money back in their bank
accounts,'' Mr McIntyre said, referring to the fact the
scaling-back meant fewer shares for applicants.
Asked what drove the demand for shares, he said the offer
came at a time of a lack of opportunities on the New Zealand
Stock Exchange (NZX), with the market fully priced.
Secondly, Genesis offered an attractive yield, or income, of
a net 10%, something difficult to achieve in other
The one-for-15 bonus share offer added to the attraction.
''Thirdly, with National polling so well, it has taken away
the fear of a Labour-Green government changing the
electricity market. There is more confidence in the sector,
with Mighty River Power and Meridian shares moving up in
The demand for shares was likely to see the shares move up at
least 10% on the $1.55 issue price, Mr McIntyre said. Craigs
had the shares valued at $1.92.
The price depended on whether those people scaled back being
prepared to get into the secondary market to top up their
Institutional investors would need to decide if it was
worthwhile topping up their holdings or selling up, he said.
Finance Minister Bill English said Genesis would have the
third-largest share register on the NZX when it listed.
More than 68,000 retail investors had been allocated shares
in the company's initial public offering. Genesis would be
88% New Zealand-owned.
The sale of 49% of Genesis had raised $733 million for the
Future Investment Fund, bring the total proceeds from the
share offer programme to $4.7 billion.
Keen interest in the offer meant scaling was required across
all investor groups, including institutions, Mr English said.
As part of the Government's commitment to put New Zealanders
at the front of the queue, larger applications were scaled
more significantly than smaller applications,.
''The scaling policy effectively places a cap of
approximately $5000 on all general offer applications. Due to
demand in the general offer, the broker firm offer was
reduced by 20%, with these shares re-allocated to the general
Labour Party SOE spokesman Clayton Cosgrove said the end of
the asset sales programme was a ''massive bonfire of a fire
''Just 68,000 Kiwis bought shares in Genesis, little more
than 1% of New Zealanders. This is despite massive taxpayer
lolly bags to convince them to buy in. The Government is
trying to claim 68,000 is a success but it is just 5000 more
than the failed sale of Meridian attracted.''
The sales programme brought in less than $4.7 billion, more
than $1 billion less than the midpoint of the $5 billion to
$7 billion election-year promise, he said.